4-23 RATIO ANALYSIS 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 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.) Barry Computer Company Balance Sheet as of December 31, 2016 (in Thousands) Cash Receivables Inventories $ 77,500 336,000 241,500 $655,000 Accounts payable Other current liabilities Notes payable to bank $129,000 117,000 84,000 $330,000 256,500 361,000 $947 500 Total current assets Total current liabilities Long-term debt Common equity Total liabilities and equity Net fixed assets 292,500 $947,500 Total assets Barry Computer Company: icas Statament for Year Ended Dscemher 3, 23s Thausands) Sales $1,607,500 Cost of goods sold Materials Labor Heat, light, and power Indirect labor 717,000 453,000 68,000 113,000 41,500 Depreciation 1,392,500 $ 215,000 115,000 30,000 $ 70,000 24,500 $ 45,500 18,200 27,300 Gross profit Selling expenses General and administrative expenses Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Federal and state income taxes (40%) Net income $ Ratio Current Quick Days sales outstanding Inventory turnover Total assets turnover Profit margin ROA ROE ROIC TIE Debt/Total capital Barry Industry Average 2.0x 1.3x 35 days 6.7x 3.0x 1.2% 35% 90% 75% 3.0x 470% aCaiculasion is based on a 365-day year