. 5. 6 7 C 8. 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. Barry Computer Company Balance Sheet as of December 31, 2019 (In Thousands) Cash $ 99,000 Accounts payable $ 105,600 Receivables 184,800 Other current liabilities 66,000 Inventories 145,200 Notes payable to bank 33,000 Total current assets $ 429,000 Total current liabilities $ 204,600 Long-term debt 198,000 Net fixed assets 231,000 Common equity (25,740 shares) 257,400 Total assets $ 660,000 Total liabilities and equity $ 660,000 9. 10. O 12 13. 14. 15. 16. Barry Computer Company: Income Statement for Year Ended December 31, 2019 (In Thousands) Sales R$ 1,100,000 Cost of goods sold Materials $528,000 Labor 231,000 Heat, light, and power 55,000 99,000 Indirect labor Depreciation 55,000 968,000 Gross profit $ 132,000 Selling expenses 66,000 s 18 Barry Computer Company: Income Statement for Year Ended December 31, 2019 (In Thousands) Sales $1,100,000 Cost of goods sold Materials $528,000 Labor 231,000 Heat, light, and power 55,000 Indirect labor 99,000 Depreciation 55,000 968,000 Gross profit $ 132,000 Selling expenses 66,000 General and administrative expenses 22,000 Earnings before interest and taxes (EBIT) 44,000 Interest expense 15,840 Earnings before taxes (EBT) $ 28,160 Federal and state income taxes (25%) 7,040 Net income 21,120 $ 0.8205 Earnings per share $ 14.00 Price per share on December 31, 2019 a. Calculate the indicated ratios for Barry. Do not round intermediate calculations. Round your answers to two deci Ratio Barry Industry Average Current 2.07 x X 133 a. Calculate the indicated ratios for Barry. Do not round Intermediate calculations. Round your answers to two decimal places. Ratio Barry Industry Average Current X 2.07 X Quick X 1.33 x Days sales outstanding days 29 days Inventory turnover X 7.95 x Total assets turnover 1.88 x Profit margin % 1.79% ROA % 3.37% % 8.73% ROE % 7.60% ROIC 2.73 TIE % 46.70% Debt/Total capital M/B 19.81 P/E 5.40 7.46 EV/EBITDA *Calculation is based on a 365-day year. b. Construct the DuPont equation for both Barry and the industry. Do not round intermediate calculations. Round your answ to two decimal places. FIRM INDUSTRY Profit margin % 1.79% b. Construct the DuPont equation for both Barry and the industry. Do not round Intermediate calculations. Round your answers to two decimal places. FIRM INDUSTRY Profit margin % 1.79% Total assets tumover 1.88 Equity multiplier X x c. Select the correct option based on Barry's strengths and weaknesses as revealed by your analysis. 1. The firm's days sales outstanding ratio is comparable to the industry average, indicating that the firm should neither tighten credit nor enforce a more stringent collection policy. The total assets turnover ratio is well below the industry average so sales should be increased, assets increased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capital. However, the company seems to be in a below average liquidity position and financial leverage is similar to others in the industry. II. The firm's days sales outstanding ratio is more than twice as long as the industry average, indicating that the firm should tighten credit or enforce a more stringent collection policy. The total assets turnover ratio is well below the industry average so sales should be increased, assets decreased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capital. Finally, it's market value ratios are also below Industry averages. However, the company seems to be in an average liquidity position and finansal leverage is similar to others in the industry. III. The firm's days sales outstanding ratio is more than twice as long as the industry average, indicating that the firm should loosen credit or apply a less stringent collection policy. The total assets turnover ratio is well below the industry average so sales should be increased, assets increased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capital. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the industry. IV. The firm's days sales outstanding ratio is less than the industry average, indicating that the firm should tighten credit or enforce a more stringent collection policy. The total assets turnover ratio is well below the industry average so sales chould he increaca accate decreacodar hath while the comnanutenrofit marinier than the inductuarante GA F