Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Data for Barry Computer Co. and its industry averages follow. Barry Computer Company: Balance Sheet as of December 31, 2016 (In Thousands) Cash $84,150 Accounts

Data for Barry Computer Co. and its industry averages follow. Barry Computer Company:

Balance Sheet as of December 31, 2016 (In Thousands)

Cash $84,150 Accounts payable $224,400
Receivables 504,900 Other current liabilities 126,225
Inventories 378,675 Notes payable to bank 112,200
Total current assets $967,725 Total current liabilities $462,825
Long-term debt $322,575
Net fixed assets 434,775 Common equity 617,100
Total assets $1,402,500 Total liabilities and equity $1,402,500

Barry Computer Company: Income Statement for Year Ended December 31, 2016 (In Thousands)

Sales $2,550,000
Cost of goods sold
Materials $1,071,000
Labor 637,500
Heat, light, and power 153,000
Indirect labor 204,000
Depreciation 76,500 2,142,000
Gross profit $ 408,000
Selling expenses 255,000
General and administrative expenses 25,500
Earnings before interest and taxes (EBIT) $ 127,500
Interest expense 29,032
Earnings before taxes (EBT) $ 98,468
Federal and state income taxes (40%) 39,387
Net income $ 59,081

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

Ratio Barry Industry Average
Current x 2.02x
Quick x 1.30x
Days sales outstandinga days 34.41 days
Inventory turnover x 6.93x
Total assets turnover x 2.12x
Profit margin % 2.21%
ROA % 4.68%
ROE % 10.19%
ROIC % 7.90%
TIE x 4.49x
Debt/Total capital % 40.03%

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 % 2.21%
Total assets turnover x 2.12x
Equity multiplier x x

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

Sound Investing, Chapter 8 - Revenue Hoaxes

Authors: Kate Mooney

3rd Edition

007171930X, 9780071719308

More Books

Students also viewed these Accounting questions