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, the number of shares is shown in thousands too. Barry Computer Companyt Income Statement for Year Endad Naramina.... s......... "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 answers to two decimal piaces. c. Select the correct option based on Barry's strenpths and weaknesses as revealed by your analysis, 1. The firm's days soles 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 proftability ratios are high compared to the industry - net income should be higher given the amount of equity, assets, and invested copital. Howeve, the company seems to be in an average liquidity position and financiat leverage is similar to others in the industry. 11. The firm's days sples outstending ratio is more than the industry average, indicating that the firm should tighten credis or enforce a more stringent collection policy, The total assets turnover ratio is well above the industry wverage 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 shouid be higher given the amount of equity, assets, ond invested capital. However, the company seems to be in an above average liquidity position and financial leverage is similar to others in the industry. 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 give the amount in the industry. othe IV, 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. 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 coliection 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 profitablity ratios are low compared to the industry - net income should be higher given the amount of equlty, assets, and invested capital. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the indestry. d. Suppose barry had doubled its sales as well as its inventories, accounts receivable, and common equity during 2021 . How would that information affect the validity of Your ratio anaysis? (Hilnt: Think about avereges and the effects of rapid growth on ratios if averages are not used, No calculations are needed.) 1. 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 substantial meaning. Potentiol investors who look only at 2021 ratios will be weil informed, and a return to normal conditions in 2022 could hurt the firm's stock price. 11. If 2021 represents a period of supernormal growth for the firm, ratios based on this year will be distorted and a comparisan between them and indistry averages will have littie meaning. Potential investors who look only at 2021 ratios will be misled, and a return to normal conditions in 2022 culd hurt the firm's stock price. 114. If 2021 represents a period of supernormal growth for the firm, ratios based on this year will be accurate and a comparison between them and induatry. averapes will have substantial meaning. Potential investors need only look at 2021 raties to be well informed, and a return to normal conditions in 2022 coulit heip the firm's stock price. IV. If 2021 represents a period of normal growth for the firm, ratios based on this year will be distorted and a companson betwen them and industry averages will hove ittie moaning. Potentiat investers who look only at 2021 ratios will be misiod, and a continuation of normal conditions in 2022 could hurt the firm's stock price. V. If 2021 repeesents a period of normal orowth for the firm, ratios bosed on this year will be accurate and a comparison between them and industry averagens all have subetontial meaning. Potentipl investors who look only at 2021 ratios will be misled, and a retum to supernormal conotions in 2022 could hurt the firmi