Data for Barry Computer Co. and its industry averages follow. a. Calculate the indicated ratios for Barry.
Question:
a. Calculate the indicated ratios for Barry.
b. Construct the DuPont equation for both Barry and the industry.
c. Outline Barrys strengths and weaknesses as revealed by your analysis.
d. Suppose Barry had doubled its sales as well as its inventories, accounts receivable, and common equity during 2016. How would that information affect the validity of your ratio analysis? (Hint: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed.)
Transcribed Image Text:
Barry Computer Company: Balance Sheet as of December 31, 2016 (in Thousands) $ 77,500 Cash Accounts payable $129,000 Receivables 336,000 Other current liabilities 117,000 Inventories 241,500 $655,000 Notes payable to bank 84,000 Total current assets Total current liabilities $330,000 Long-term debt 256,500 Common equity Net fixed assets 292,500 $947,500 361,000 Total liabilities and equity Total assets $947,500 Barry Computer Company: Income Statement for Year Ended December 31, 2016 (in Thousands) Sales $1,607,500 Cost of goods sold Materials $717,000 Labor 453,000 Heat, light, and power 68,000 Indirect labor 113,000 41,500 1,392,500 Depreciation Gross profit Selling expenses $ 215,000 115,000 General and administrative expenses 30,000 Earnings before interest and taxes (EBIT) 70,000 Interest expense 24,500 Earnings before taxes (EBT) 45,500 Federal and state income taxes (40%) 18,200 Net income %24 27,300
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (18 reviews)
a Dollar amounts in thousands b For the firm ROE NIS STA X TAE 17 17 947500361000 76 For the industr...View the full answer
Answered By
Allan Olal
I have vast tutoring experience of more than 8 years and my primary objective as a tutor is to ensure that a student achieves their academic goals.
4.70+
78+ Reviews
412+ Question Solved
Related Book For
Fundamentals of Financial Management
ISBN: 978-1305635937
Concise 9th Edition
Authors: Eugene F. Brigham
Question Posted:
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
Students also viewed these Finance questions
-
Data for Barry Computer Co. and its industry averages follow. a. Calculate the indicated ratios for Barry. b. Construct the DuPont equation for both Barry and the industry. c. Outline Barry's...
-
Data for Barry Computer Company and its industry averages follow. a. Calculate the indicated ratios for Barry. b. Construct the extended Du Pont equation for both Barry and the industry. c. Outline...
-
Data for Lozano Chip Company and its industry averages follow. a. Calculate the indicated ratios for Lozano. b. Construct the extended DuPont equation for both Lozano and the industry. c. Outline...
-
A plank with a mass M = 6.00 kg rides on top of two identical solid cylindrical rollers that have R = 5.00 cm and m = 2.00 kg (Fig. P10.86). The plank is pulled by a constant horizontal force F of...
-
How do differences in income levels and income distribution among nations affect international businesses?
-
(a) Draw and name all five isomers of formula C3H5F. (b) Draw all 12 acyclic (no rings) isomers of formula C4H7Br. Include stereoisomers. (c) Cholesterol, C27H46O, has only one pi bond. With no...
-
Gamma Oil Company obtained the rights to shoot 25,000 acres at a cost of $0.20/ acre on May 3, 2017. Gamma contracted and paid \($80,000\) for a reconnaissance survey during 2017. As a result of this...
-
A company that sells products through mail-order catalogs wants to evaluate whether the mean sales for their most recent catalog were different from the mean of $15 from past catalogs. For a random...
-
What ordered pair is shown plotted on the rectangular coordinate plane below? 10 -10 5 17 S 0 10 5 10
-
Sutherland manufactures and sells 50,000 laser printers each month. A principal component part in each printer is its paper feed drive. Sutherland's plant currently has the monthly capacity to...
-
The shareholders equity accounts of Tsui, Inc. at December 31, 2013, are as follows: Preferred shares, $3 noncumulative, unlimited number authorized, 4,000 issued ..................................
-
A firm has been experiencing low profitability in recent years. Perform an analysis of the firms financial position using the DuPont equation. The firm has no lease payments but has a $2 million...
-
SC Masterpiece Inc. granted 1,000 stock options to certain sales employees on January 1, Year 1. The options vest at the end of three years (cliff vesting) but are conditional upon selling 20,000...
-
Community Policing was very popular in the United States during the 1990s, and there is a renewed interest in it today given the police-community relations crisis that we face in many jurisdictions...
-
Suppose you have $600 today and you need $1,300 to buy a new laptop. How long will you have to wait to buy the laptop if she earns 8 percent compounded annually on her money?
-
Assignment: Question 1: For the Linux command useradd, you used aflag -m. What does the -m flag do? Question 2: Which Windows passwords were cracked using hashcatand how long did it take? Question 3:...
-
Watch the 1982 American legal drama film, The Verdict, Identify the elements of the medical malpractice lawsuit (with supporting rationale) as argued by attorney Frank Galvin, portrayed by Paul...
-
i posted several questions yesterday day could u please answer them i need them 7:42 w2.pdf MATIN Spring 201 Problem 7. (2 pts) Determine whether the following state or f [Finde-limfix-a (A) Tran 4...
-
Show that NP is closed under the star operation.
-
Juanita owns a home in Richardson, TX. She purchases a Homeowners Policy (HO-3) from Farm State Ins. Co. The policy provides $100,000 in liability coverage (coverage E) and $5,000 in Med Pay coverage...
-
The SEC attempts to protect investors who are purchasing newly issued securities by making sure that the information put out by a company and its investment bankers is correct and is not misleading....
-
The SEC attempts to protect investors who are purchasing newly issued securities by making sure that the information put out by a company and its investment bankers is correct and is not misleading....
-
The SEC attempts to protect investors who are purchasing newly issued securities by making sure that the information put out by a company and its investment bankers is correct and is not misleading....
-
Cobe Company has already manufactured 21,000 units of Product A at a cost of $15 per unit. The 21,000 units can be sold at this stage for $500,000. Alternatively, the units can be further processed...
-
The May 2018 revenue and cost information for Boise Outfitters, Inc. follows: (Click the icon to view the revenue and cost information.) Prepare a standard cost income statement for management...
-
Problem 13 Jon's Auto Parts Ltd. is a CCPC which manufactures small equipment, was incorporated in 2006, and had the following balances in its records concerning its capital assets as at January 1,...
Study smarter with the SolutionInn App