Question

RATIO ANALYSIS

Data for Barry Computer Co. and its industry averages follow.

Barry Computer Company:
Balance Sheet as of December 31, 2016 (In Thousands)
Cash	$228,480		Accounts payable	$261,120
Receivables	587,520		Other current liabilities	146,880
Inventories	391,680		Notes payable to bank	163,200
Total current assets	$1,207,680		Total current liabilities	$571,200
			Long-term debt	$326,400
Net fixed assets	424,320		Common equity	734,400
Total assets	$1,632,000		Total liabilities and equity	$1,632,000

Barry Computer Company: Income Statement for Year Ended December 31, 2016 (In Thousands)
Sales			$2,400,000
Cost of goods sold
Materials	$1,128,000
Labor	552,000
Heat, light, and power	72,000
Indirect labor	192,000
Depreciation	48,000		1,992,000

Gross profit		$   408,000
Selling expenses		264,000
General and administrative expenses		72,000
Earnings before interest and taxes (EBIT)		$     72,000
Interest expense		29,376
Earnings before taxes (EBT)		$     42,624
Federal and state income taxes (40%)		17,050
Net income		$     25,574

1. Calculate the indicated ratios for Barry. Round your answers to two decimal places.

   Ratio	Barry	Industry Average
   Current	x	2.07x
   Quick	x	1.38x
   Days sales outstandinga	days	42.55 days
   Inventory turnover	x	6.31x
   Total assets turnover	x	1.72x
   Profit margin	%	1.01%
   ROA	%	1.74%
   ROE	%	3.87%
   ROIC	%	7.80%
   TIE	x	2.48x
   Debt/Total capital	%	41.10%

   
   ^aCalculation is based on a 365-day year.
   
2. Construct the DuPont equation for both Barry and the industry. Round your answers to two decimal places.

   	FIRM	INDUSTRY
   Profit margin	%	1.01%
   Total assets turnover	x	1.72x
   Equity multiplier	x	x

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE