Data for Barry Computer Co. and its industry averages follow. The firm's debt is peiced at par; so the market value or its debt equils its book value : sioce dollars are in thousands. the number of shares is shown in thousands too. Barry Computer Company: Income Statement for Year Ended December 31, 2021 (in thousands) Calculationisbasedona365-day year. c. Select the correct option based on Barry's strengths and wealinesses as revealed by your analysis: 1. The firm's days sales outstanding ratio is more than the industry average, indicating that the firm should tighten credit or enforce a more stringent coliection policy. The total assets turnover ratio is well above the industry average so sales should be increased, assets increased, or both. Whille the company's profit. margin is higher than the industry average, its other profitablity ratios are low compared to the indurtry a net income should be higher given the amount of equity, assets, and invested capital. However, the company seems to be in an above average liquidity postion and finandal leverage is similiar to others in the industry: It. 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 weli below the industry average so sales should be increased, assets increased, or both. While the company's profit margin is higher than the industry aversge, its other profitability ratios are low compsred to the industry net income should be higher given the amount o 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. III. 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 turnever 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 profitabisty ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capital. Finaly, it's market value ratios are also below industry averages, However, the company seems to be in an average liquidity position and financlal leverage is similar to others in the industry. IV. 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 apgiy 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. V. The firm's days sales outstanding rato is less than the industry average, indicating that the firm should tighten credit or enforce a more stringent coliection. policy. The total assets turnover ratio is wel below the industry overage so sales should be increased, assets decreased, or both. While the company's profit margin is lower than the industry average, its other profitability ratios are high compared to the industry = net income should be higher given the amount of equity, assets, and imvested capital, However, the company seems to be in an average liquidity position and financial leverage is simarar to others in the industry. stiet: B d. Suppose Barry had doubled its sales as weil as its inventories, accounts receivable, and common equity during 2021. 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 caiculations are needed.) 1. If 2021 represents a period of normal growth for the firm, ratios based on this year wail be accurate and a comparison between them and industry averages will have substantial meaning. Potential investors who look only at 2021 ratios will be miled, and a return to supernormal conditions in 2022 could hurt the firm's stock price. II. If 2021 represents a period of supernomal growth for the firm, ratios bssed on this year will be distorted and a comparison between them and industry averages will have substantial meaning. Potential investors who look only at 2021 ratios will be well informed, and a return to narmal condithens in 2022 could hurt the firm's stock price. III. If 2021 represents a period of supernormal growth for the firm, ratios based on this year will be distorted and a comparison between them and industry averages Will have little meaning. Protential investors who look only at 2021 ratios wil be misled, and a return to normal conditions in 2022 could hurt the firm's stock price. IV. if 2021 represents a period of supernormal growth for the firm, ratios based on this year wal be accurate and a comparison between them and industry averages will have substantial meaning. Potential investors need only look at 2021 ratios to be well informed, and a return to normal conditions in 2022 could help the firm's stock price. V. If 2021 represents a peried of normal growth for the firm, ratios based on this year wal be disterted and a comparison between them and industry averages will thave little meaning. Potential investors who look only at 2021 retios will be misied, and a continuation of normal conditions in 2022 could hurt the firm's stock price. Data for Barry Computer Co. and its industry averages follow. The firm's debt is peiced at par; so the market value or its debt equils its book value : sioce dollars are in thousands. the number of shares is shown in thousands too. Barry Computer Company: Income Statement for Year Ended December 31, 2021 (in thousands) Calculationisbasedona365-day year. c. Select the correct option based on Barry's strengths and wealinesses as revealed by your analysis: 1. The firm's days sales outstanding ratio is more than the industry average, indicating that the firm should tighten credit or enforce a more stringent coliection policy. The total assets turnover ratio is well above the industry average so sales should be increased, assets increased, or both. Whille the company's profit. margin is higher than the industry average, its other profitablity ratios are low compared to the indurtry a net income should be higher given the amount of equity, assets, and invested capital. However, the company seems to be in an above average liquidity postion and finandal leverage is similiar to others in the industry: It. 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 weli below the industry average so sales should be increased, assets increased, or both. While the company's profit margin is higher than the industry aversge, its other profitability ratios are low compsred to the industry net income should be higher given the amount o 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. III. 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 turnever 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 profitabisty ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capital. Finaly, it's market value ratios are also below industry averages, However, the company seems to be in an average liquidity position and financlal leverage is similar to others in the industry. IV. 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 apgiy 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. V. The firm's days sales outstanding rato is less than the industry average, indicating that the firm should tighten credit or enforce a more stringent coliection. policy. The total assets turnover ratio is wel below the industry overage so sales should be increased, assets decreased, or both. While the company's profit margin is lower than the industry average, its other profitability ratios are high compared to the industry = net income should be higher given the amount of equity, assets, and imvested capital, However, the company seems to be in an average liquidity position and financial leverage is simarar to others in the industry. stiet: B d. Suppose Barry had doubled its sales as weil as its inventories, accounts receivable, and common equity during 2021. 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 caiculations are needed.) 1. If 2021 represents a period of normal growth for the firm, ratios based on this year wail be accurate and a comparison between them and industry averages will have substantial meaning. Potential investors who look only at 2021 ratios will be miled, and a return to supernormal conditions in 2022 could hurt the firm's stock price. II. If 2021 represents a period of supernomal growth for the firm, ratios bssed on this year will be distorted and a comparison between them and industry averages will have substantial meaning. Potential investors who look only at 2021 ratios will be well informed, and a return to narmal condithens in 2022 could hurt the firm's stock price. III. If 2021 represents a period of supernormal growth for the firm, ratios based on this year will be distorted and a comparison between them and industry averages Will have little meaning. Protential investors who look only at 2021 ratios wil be misled, and a return to normal conditions in 2022 could hurt the firm's stock price. IV. if 2021 represents a period of supernormal growth for the firm, ratios based on this year wal be accurate and a comparison between them and industry averages will have substantial meaning. Potential investors need only look at 2021 ratios to be well informed, and a return to normal conditions in 2022 could help the firm's stock price. V. If 2021 represents a peried of normal growth for the firm, ratios based on this year wal be disterted and a comparison between them and industry averages will thave little meaning. Potential investors who look only at 2021 retios will be misied, and a continuation of normal conditions in 2022 could hurt the firm's stock price