Data for Barry Computer Co. and its industry averages follow. The firm€™s debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too.
a. Calculate the indicated ratios for Barry.
b. Construct the DuPont equation for both Barry and the industry.
c. Outline Barry€™s 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 2018. 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.)

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Barry Computer Company: Balance Sheet as of December 31, 2018 (in Thousands) $ 77,500 Cash Accounts payable $129,000 Receivables Other current liabilities 117,000 336,000 Inventories Notes payable to bank 241,500 84,000 $ 655,000 $330,000 Total current assets Total current liabilities Long-term debt 256,500 Net fixed assets Common equity (36,100 shares) 292,500 361,000 $ 947,500 Total liabilities and equity Total assets $947,500 Barry Computer Company: Income Statement for Year Ended December 31, 2018 (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 Depreciation 41,500 1,392,500 Gross profit 215,000 Selling expenses 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 27,300 Earnings per share 0.75623 Price per share on December 31, 2018 $ 12.00 Ratio Barry Industry Average Current 2.0x Quick 1.3X Days sales outstanding 35 days Inventory turnover 6.7X Total assets turnover 3.0х Profit margin 1.2% ROA 3.6% ROE 9.0% ROIC 7.5% TIE 3.0х Debt/Total capital 47.0% M/B 4.22 P/E 17.86 EV/EBITDA 9.14