Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

image text in transcribed

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 Company: Balance Sheet as of December 31, 2021 (in thousands) Cash $ 103,250 Accounts payable Receivables 743,400 Other current liabilities Inventories 536,900 Notes payable to bank Total current assets $1,383,550 Total current liabilities Long-term debt Net fixed assets 681,450 Common equity (111,510 shares) Total assets $2,065,000 Total liabilities and equity $ 247,800 185,850 103, 250 $ 536,900 413,000 1,115,100 $2,065,000 Barry Computer Company: Income Statement for Year Ended December 31, 2021 (in thousands) Sales $2,950,000 Cost of goods sold Materials $1,298,000 Labor 590.000 Heat, light, and power 206,500 Indirect labor 265,500 2,360,000 Gross profit $ 590,000 Selling expenses 354,000 General and administrative expenses 59,000 Depreciation 59,000 Earnings before interest and taxes (EBIT) $ 118,000 Interest expense 41,300 Earnings before taxes (EBT) $ 76,700 Federal and state income taxes (25%) 19,175 Net income $ 57,525 Earnings per share $ 0.5159 Price per share on December 31, 2021 $ 14.00 X a. Calculate the indicated ratios for Barry. Do not round intermediate calculations. Round your answers to two decimal places. Ratio Barry Industry Average Current 2.59 x Quick 1.63% Days sales outstandinga days 43 days Inventory turnover 5.76x Total assets turnover 1.61 x Profit margin % 1.82% ROA % 2.93% ROE % 5.49% ROIC % 7.10% TIE 2.89 x Debt/Total capital % 30.55% M/B 3.40 P/E 29.64 EV/EBITDA 13.88 a 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 places. FIRM INDUSTRY Profit margin % 1.82% Total assets turnover 1.61x Equity multiplier

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_2

Step: 3

blur-text-image_3

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 Changing Politics Of Finance In Korea And Thailand From Deregulation To Debacle

Authors: Xiaoke Zhang

1st Edition

1138811815, 9781138811812

More Books

Students also viewed these Finance questions

Question

If ( A^2 - A + I = 0 ), then inverse of matrix ( A ) is?

Answered: 1 week ago

Question

What is computer neworking ?

Answered: 1 week ago