[The following information applies to the questions displayed below.]Summary information from the financial statements of two companies competing in the same industry follows.  Barco Company Kyan Company   Barco Company Kyan CompanyData from the current year-end balance sheets     Data from the current year’s income statement    Assets     Sales $ 780,000 $ 907,200Cash $ 19,500 $ 33,000 Cost of goods sold 590,100 630,500Accounts receivable, net 36,400 59,400 Interest expense 8,000 13,000Merchandise inventory 84,240 130,500 Income tax expense 14,992 25,045Prepaid expenses 5,600 7,500 Net income 166,908 238,655Plant assets, net 320,000 305,400 Basic earnings per share 4.17 5.79Total assets $ 465,740 $ 535,800 Cash dividends per share 3.74 4.03Liabilities and Equity     Beginning-of-year balance sheet data    Current liabilities $ 71,340 $ 103,300 Accounts receivable, net $ 30,800 $ 55,200Long-term notes payable 78,800 105,000 Merchandise inventory 63,600 105,400Common stock, $5 par value 200,000 206,000 Total assets 448,000 392,500Retained earnings 115,600 121,500 Common stock, $5 par value 200,000 206,000Total liabilities and equity $ 465,740 $ 535,800 Retained earnings 98,292 48,8812a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total assets, and (d) return on equity. Assuming that each company’s stock can be purchased at $90 per share, compute their (e) price-earnings ratios and (f) dividend yields.2b. Identify which company’s stock you would recommend as the better investment.

The following tables provide information regarding two companies. Metrics Company A (in $ million) Company B (in $ million)Sales revenue 4 25Cost of goods sold 0.9 3.2Operating working capital 0.25 4 Company A (all figures in $ million)Fixed assets2.5Owners equity3Cash2.25Short-term debt0.5Accounts receivable0.5Long-term debt1.5Inventory0.75Accounts payable1 Company B (all figures in $ million)Fixed assets11Owners equity13Cash4Short-term debt2.5Accounts receivable2Long-term debt3.5Inventory3Accounts payable1 Assume 360 operating days in a year.Question 2/2MandatoryInterpreting Activity RatiosDetermine which of the following statement is true? (Note: More than one option may be correct.)For company A, accounts receivable of $0.5 million represents 45 days of sales revenue outstanding Both the company pay their supplier 300 days after deliveryCompany B’s days inventory outstanding (DIO) is greater than company A’s DIOFor company B, accounts receivable of $2 million represents 45 days of sales outstanding

Following are comparative balance sheets spanning 3 years. Express the balance sheets in common-size percentages for each year.Comparative Balance SheetsFor Years Ended December 31  Current Year 1 Year Ago 2 Years AgoCash $ 640 $ 525 $ 552Accounts receivable, net 960 1,200 1,104Merchandise inventory 2,000 1,650 1,242Plant assets, net 4,400 4,125 4,002Total assets $ 8,000 $ 7,500 $ 6,900Accounts payable $ 1,600 $ 825 $ 966Long-term notes payable 1,760 1,875 1,518Common stock 3,440 3,675 3,450Retained earnings 1,200 1,125 966Total liabilities and equity $ 8,000 $ 7,500 $ 6,900

Link Between Financial StatementsThe following information is available for a company.  Income Statement (In ₹ million)Sales revenue2Operating expenses0.45 Operating profit 1.55 Interest expenses 0.22Taxes 0.28Net profit? Cash Flow Statement (In ₹ million)Cash in the beginning 0.75 Cash generated during the year?Cash at the end 1.52   Balance SheetAssetAmount (in ₹ million)Liability and equityAmount (in ₹ million)Fixed assets6Share capital5Cash? Profit for the year?Inventory2.53Owner’s equity?    Long-term debt4 Total assets?Total liabilities and equity ? What is the total assets and owner’s equity? Total assets: ₹ 10.05 million; owner’s equity: ₹ 6.05 millionTotal assets: ₹ 15.52 million; owner’s equity: ₹ 6.52 millionTotal assets: ₹ 9.05 million; owner’s equity: ₹ 5.05 million

The statement below is likely from which of the following business (type of business and form of organisation):Balance Sheet As of 30th June 2021Assets  Cash$50,000 Accounts Receivables90,000  Land270,000  Buildings (net)220,700Total assets$630,700Liabilities  Accounts payable280,000Net Assets$350,700Shareholders' Equity Share capital$225,000Retained earnings  125,700Total stockholders' equity$350,700Question 2Answera.a merchandising partnershipb.a merchandising companyc.a merchandising sole-proprietorshipd.a service sole-proprietorshipe.a service company

The following financial statement data are available for a company:Metric $ thousandsOperating income 3,390Net income 2,210Operating assets 3,850Change in cash and cash equivalents 1,010Change in cash from operating activities 1,750Free cash flow to the firm 2,240The company’s cash-to-income ratio is closest to:A.0.79.B.0.66.C.0.52.