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	$61,950		Accounts payable	$80,535
Receivables	210,630		Other current liabilities	92,925
Inventories	130,095		Notes payable to bank	68,145
Total current assets	$402,675		Total current liabilities	$241,605
			Long-term debt	$130,095
Net fixed assets	216,825		Common equity	247,800
Total assets	$619,500		Total liabilities and equity	$619,500

Barry Computer Company: Income Statement for Year Ended December 31, 2016 (In Thousands)
Sales			$1,050,000
Cost of goods sold
Materials	$441,000
Labor	241,500
Heat, light, and power	52,500
Indirect labor	63,000
Depreciation	42,000		840,000

Gross profit		$   210,000
Selling expenses		126,000
General and administrative expenses		31,500
Earnings before interest and taxes (EBIT)		$     52,500
Interest expense		15,611
Earnings before taxes (EBT)		$     36,889
Federal and state income taxes (40%)		14,756
Net income		$     22,133

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

   Ratio	Barry	Industry Average
   Current	x	1.68x
   Quick	x	1.07x
   Days sales outstandinga	days	34.87 days
   Inventory turnover	x	8.65x
   Total assets turnover	x	1.98x
   Profit margin	%	2.01%
   ROA	%	3.97%
   ROE	%	9.92%
   ROIC	%	7.40%
   TIE	x	3.39x
   Debt/Total capital	%	45.54%

   
   ^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	%	2.01%
   Total assets turnover	x	1.98x
   Equity multiplier	x	x

Answer 1

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