4-23 RATIO ANALYSIS 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 dol- lars are in thousand, 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 e 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, 2018 (in Thousandal Caith 5 77,500 Accounts payable Receivables 336000 Other current liabies ventories 241,500 Notes payable to bank Tour current amet $655.000 Total current les Long term Netfade 292500 Common equity 06, 100 share 5042509 Total bites and 5128000 117.000 34000 5330000 256,500 361,000 1942,500 Barry Computer Company Income Stoment for Your Ihded December 31 2018 in Thousand Sales 51.807500 Cost of goods sold Materials $717000 Labor 63000 Heat, light, and power 68.000 Indirect labor 113000 Depreciation 41,500 1392500 Gross profit 215.000 Selling expenses 115.000 General and administrative expenses 30000 Earnings before interest and taxes BT) 5 70,000 Interest expense 240500 Ewnings before taxes ET) $ 45.500 Federal and state income takes 40 11.200 Net income 27300 $ 075623 Earnings per share Price per share on December 31, 2018 5 12.00 Ratio Barry Industry Average 20 Current Quick Dayssas outstanding Inventory turnover Totale turve 35 57 30X Promargar 12 116 ROA ROE 90 ROC 30 Detrotal capital 4204 PE EVABITDA 914 Cdo ere the $1.47300 $71700 63000 68 DOO 113 000 41 500 Dow Computer Companie December 31, 2018 On The Sales Cost of goods sold Materials Libor Heat, light, and power Indirect labor Depreciation Gros profit Selling expenses General and administrative expenses Earnings before interest and taxes EBT) Interest expense Earnings before taxes EBT) Federal and state income taxes (40 Net income 1292.500 $ 215,000 115,000 30,000 5 70.000 24500 45.500 12200 27.300 Earnings per share Price per share on December 31, 2018 5 07503 $ 12.00 Ratio Barry Industry Average 20% 13 Current 35 days Quick Days sales outstanding Inventory turnover Total assets turnover 67x 30 x 12 Profit margin ROA 90% ROE 75 30 ROIC TIE 4709 Debit/Total capital MB 1786 914 PE EVEBITDA "Calculation is based on a 35-day year in recent years. Per Total assets $300000 Total liabilities and equity Cost of goods sold Sales 4-23 RATIO ANALYSIS 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 dol- lars 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.) $129000 112.000 Barry Computer Company: Balance Sheet as of December 31, 2018 in Thousands! Cash $ 77,500 Accounts payable Receivables 336000 Other current liabilities 241.500 Notes payable to bank Totalcarent assets 5655.000 Total current liabilities Long-term debt 292500 Common equity 36,100 share Tout 5942.500 Tots abilities and equity $330000 256,500 301.000 $947.500