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, 2018 (In Thousands) Cash $60,950 Accounts payable $97,520 Receivables 225,515 Other current liabilities 85,330 Inventories 134,090 Notes payable to bank 67,045 Total current assets $420,555 Total current liabilities $249,895 Long term debt $182,850 Net fixed assets 188,945 Common equity (17,675 5 shares) 176,755 Total assets $609,500 Total liabilities and equity $609,500 Barry Computer Company Income Statement for Year Ended December 31, 2018 (In Thousands) Sales $1,150,000 Cost of goods sold Materials $529,000 Labor 287,500 Heat, light, and power 46,000 Indirect labor 126,500 Depreciation 57,500 1,046,500 Gross profit $ 103,500 Selling expenses 57,500 General and administrative expenses $ 11,500 Earnings before interest and taxes (EBIT) $ 34,500 Interest expense 14,628 Earnings before taxes (EBT) $ 19,872 Federal and state income taxes (40 ) 7,949 Net income $ 11,923 Earnings per share $ 0 67455 Price per share on December 31, 2018 $ 11 00 Calculate the indicated ratios for Barry Round your answers to two decimal places Ratio Barry Industry Average Current x 1 73x Quick x 1 12x Days sales outstanding a days 34 08 days Inventory turnover x 9 19x Total assets turnover x 2 20x Profit margin 0 99 ROA 2 17 ROE 7 49 ROIC 7 80 TIE x 2 39x Debt Total capital 59 47 M B 4 10 P E 18 62 EV EBITDA 6 19 a Calculation is based on a 365 day year Construct the DuPont equation for both Barry and the industry Round your answers to two decimal places FIRM INDUSTRY Profit margin 0 99 Total assets turnover x 2 20x Equity multiplier x x Select the correct option based on Barry's strengths and weaknesses as revealed by your analysis Select IIIIIIIVVItem 19 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 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 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 invested capital However, the company seems to be in an average liquidity position and financial leverage is similar to others in the industry 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 collection policy The total assets turnover ratio is well above 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 above average liquidity position and financial leverage is similar to others in the industry 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 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 financial leverage is similar to others in the industry

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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

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, 2018 (In Thousands)

Cash	$60,950	Accounts payable	$97,520
Receivables	225,515	Other current liabilities	85,330
Inventories	134,090	Notes payable to bank	67,045
Total current assets	$420,555	Total current liabilities	$249,895
		Long-term debt	$182,850
Net fixed assets	188,945	Common equity (17,675.5 shares)	176,755
Total assets	$609,500	Total liabilities and equity	$609,500

Barry Computer Company: Income Statement for Year Ended December 31, 2018 (In Thousands)

Sales		$1,150,000
Cost of goods sold
Materials	$529,000
Labor	287,500
Heat, light, and power	46,000
Indirect labor	126,500
Depreciation	57,500	1,046,500

Gross profit	$	103,500
Selling expenses		57,500
General and administrative expenses	$	11,500
Earnings before interest and taxes (EBIT)	$	34,500
Interest expense		14,628
Earnings before taxes (EBT)	$	19,872
Federal and state income taxes (40%)		7,949
Net income	$	11,923
Earnings per share	$	0.67455
Price per share on December 31, 2018	$	11.00

Calculate the indicated ratios for Barry. Round your answers to two decimal places.

Ratio	Barry	Industry Average
Current	x	1.73x
Quick	x	1.12x
Days sales outstanding^a	days	34.08 days
Inventory turnover	x	9.19x
Total assets turnover	x	2.20x
Profit margin	%	0.99%
ROA	%	2.17%
ROE	%	7.49%
ROIC	%	7.80%
TIE	x	2.39x
Debt/Total capital	%	59.47%
M/B	%	4.10%
P/E	%	18.62%
EV/EBITDA	%	6.19%

^aCalculation is based on a 365-day year.

Construct the DuPont equation for both Barry and the industry. Round your answers to two decimal places.

FIRM INDUSTRY

Profit margin % 0.99%

Total assets turnover x 2.20x

Equity multiplier x x
Select the correct option based on Barry's strengths and weaknesses as revealed by your analysis. -Select-IIIIIIIVVItem 19
1. 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.
2. 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 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 invested capital. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the industry.
3. 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 collection policy. The total assets turnover ratio is well above 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 above average liquidity position and financial leverage is similar to others in the industry.
4. 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.
5. 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 financial leverage is similar to others in the industry.