Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

compute and workthrough please 4-1: Ratio Analysis Ratio Analysis Data for Barry Computer Co. and its industry averages follow. Barry Computer Company: Balance Sheet as

compute and workthrough please image text in transcribed
image text in transcribed
image text in transcribed
4-1: Ratio Analysis Ratio Analysis Data for Barry Computer Co. and its industry averages follow. Barry Computer Company: Balance Sheet as of December 31, 2014 (In Thousands) Cash $204,750 Accounts payable $150,150 Receivables 491,400 Other current liabilities 109,200 Inventories 341,250 Notes payable 81,900 Total current assets $1,037,400 $341,250 Total current liabilities Long-term debt $313,950 Net fixed assets 327,600 Common equity 709,800 Total assets $1,365,000 $1,365,000 Total liabilities and equity Barry Computer Company: Income Statement for Year Ended December 31, 2014 (In Thousands) Sales $2,100,000 Cost of goods sold Materials $840,000 work Materials $840,000 Labor 630,000 Heat, light, and power 84,000 Indirect labor 189,000 Depreciation 63,000 $1,806,000 Gross profit $294,000 168,000 Selling expenses General and administrative expenses 63,000 Earnings before interest and taxes (EBIT) $63,000 interest expense 28,256 34,744 Earnings before taxes (EBT) Federal and state income taxes (40%) 13,898 Wet income $20,846 Calculate the indicated ratios for Barry. Round your answers to two decimal places. Ratio Barry Industry Average Current 3.04 x 2.89x Quick 2.04 x 1.94x Days sales outstanding 84.41 days 39.91 days Inventory turnover 6.72x mework 1.73x Total assets turnover Profit margin 0.93% ROA 1.61% ROE 3.26% ROIC 7.30% TIE 3.50x Debt/Total capital 47.50% Calculation is based on a 365-day year. b. Construct the Du Pont equation for both Barry and the industry. Round your an FIRM INDUSTRY Profit margin 0.93% Total assets turnover 1.73x Equity multiplier C. Outline Barry's strengths and weaknesses as revealed by your analysis. -Select- 1. The firm's days sales outstanding is less than the industry average, indicati collection policy. The total assets turnover ratio is well below the industry a While the company's profit margin is lower than the industry average, its ol income should be higher given the amount of equity and assets. However, t financial leverage is similar to others in the industry, 11. The firm's days sales outstanding is more than the industry average, indica

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Complete Guide To Operational Auditing

Authors: Harry R. Reider

1st Edition

0471594199, 978-0471594192

More Books

Students also viewed these Accounting questions

Question

2. Outline the business case for a diverse workforce.

Answered: 1 week ago