Data for Barry Computer Co. and its Industry averages follow. The fema debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousanch, number of shares are shown In thousands too Barry Computer Company Balance Sheet as of December 31, 2019 (In Thousands) Cash $ 90,405 Accounts payable Receivables 503,685 Other current abilities Inventories 322,875 Notes payable to hank Total current assets $916,965 Total current abilities Long-term debit Net fixed assets 374,535 Common equity (52,951.5 shares) Total assets $1,291,500 Tetails and equity $ 193,725 206,640 77,490 $ 477,855 284,130 529,515 51,251,500 Barry Computer Company Income Statement for Year Ended December 31, 2019 (In Thousands) Sales $2,050,000 Cast of goods sold Materials $922,500 Labor 492.000 Heat, light, and power 103,500 Indirect labor 102,500 Depreciation 61,00 1,722.000 Gross profit 325,000 Selling expenses 184,500 General and administrative expenses 61.500 Taming before interest and takes ( ET) 22.000 Interest expense 22.730 Faming before taxes (ET) 19,270 Federal and state income (25) 14.00 Net income 42 Faris per share 0.0395 Price per share on December 31, 2019 11.00 Earnings before taxes (EBT) ederal and state income taxes (25%) et Income amnings per share rice per share on December 31, 2019 59,270 14,818 $ 44,452 $ 0.8395 $ 11.00 a. Calculate the indicated ratios for Barry. Do not round intermediate calculations. Round your answers to two decimal places Ratio Barry Industry Average Current 1.88% Quick X 1.29% Days sales outstanding days 42 days Inventory turnover X 6.66% Total assets turnover X 1.89% Profit margin 2.03% ROA 3.82% ROE 8.939 ROIC 7.10% TIE X 3.52% Debt/Total capital 39.98% M/B 4.10 P/E 15.36 EV/EBITDA 8.76 ***** 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 % Profit margin Total assets turnover Equity multiplier INDUSTRY 2.035 1.89 Select the correct option based on Barry's strengths and weaknesses as revealed by your analysis. 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 enf assets turnover ratio is well below the industry average so sales should be increased, assets decreased, or both. While the company's profit m other profitability ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capi below industry averages. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the 11. 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 app as www.thindwedding while the AMARO Select the correct option based on Barry's strengths and weaknesses as revealed by your analysis 1. 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 enforon a more stringent collection polky. The total assets tumover ratio is well below the industry average so sales should be increased, at decreased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios we low compared to the industry - net incorner 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 II. The firm's days sales outstanding ratio is more than twice as long as the industry average Indicating that the firm should loosen creditor apply a less stringent collection policy. The total assets tumover ratio is wel 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 averagn liquidity position and financial leverage is similar to others in the industry, III. The firm's day 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 se sales should be increased, assets decreased, or both. While the company's profit margin 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 TV. The firm's days sales outstanding ratio is more than the Industry average Indicating that the firm should tighten creditorenforon a more stringent collection policy. The total assets turnover ratio is well above the industry average so sales should be increased, es 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. V The firm's days sales outstanding ratio is comparable to the industry average, indicating that the firm should nether tighten credit ner for a more stringent collection policy. The total assets turnover ratio well below the industry average so sales should be increased, ancreased, or both. While the company profit margin is higher than the industry average, 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 d. Suppose Barry had doubled its sales as well as its inventories, accounts receivable, and common culty during 2019. How would that information affect the validity of your ratio analysis (Hint: Think about everages and the effects of rapid growth on ratios if averages are not used Necations are needed.) LY 2019 res a period of normal growth for the firm ratios based on this year torted and comparison between them and industry averages will have little meaning, Potential divestors who look only a 2019 ratios will be misted, and a continuation of normal condition in 2020 could hurt the firm's stock price II. 1 2019 represents a period of normal growth for the firm ratios based on this year will be turate and comparison between there and industry averages will have substantial meaning Potential investors who took only at 2019 rates will be misted, and a return to supermal conditions in 2020 could hurt there's stock price III. I 2019 represents a period of superarmal growth for the firm ratios based on this year will be distorted and a comparison between them and Industry averages will have substantial meaning. Potential investors who look only at 2019 ratios will be well informed and return to normal conditions in 2020 could hurt the firm's stock price TV. If 2019 represents a period of super normal growth for the formation on this war wistorted and a comparison between them and industry everages will have little meaning Potential investors who look only at 2019 ratios will be misted, and a return to normal conditions in 2020 could hurt the firm's stock price V 172019 represents a period of supernormal growth for the firm, ratios based on this year will be accurate and a comparison between them and industry leverages will have substantial meaning. Preto need only look at 2019 to be well informe a return to normal condition in 1920COUNT help the stock price Data for Barry Computer Co. and its Industry averages follow. The fema debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousanch, number of shares are shown In thousands too Barry Computer Company Balance Sheet as of December 31, 2019 (In Thousands) Cash $ 90,405 Accounts payable Receivables 503,685 Other current abilities Inventories 322,875 Notes payable to hank Total current assets $916,965 Total current abilities Long-term debit Net fixed assets 374,535 Common equity (52,951.5 shares) Total assets $1,291,500 Tetails and equity $ 193,725 206,640 77,490 $ 477,855 284,130 529,515 51,251,500 Barry Computer Company Income Statement for Year Ended December 31, 2019 (In Thousands) Sales $2,050,000 Cast of goods sold Materials $922,500 Labor 492.000 Heat, light, and power 103,500 Indirect labor 102,500 Depreciation 61,00 1,722.000 Gross profit 325,000 Selling expenses 184,500 General and administrative expenses 61.500 Taming before interest and takes ( ET) 22.000 Interest expense 22.730 Faming before taxes (ET) 19,270 Federal and state income (25) 14.00 Net income 42 Faris per share 0.0395 Price per share on December 31, 2019 11.00 Earnings before taxes (EBT) ederal and state income taxes (25%) et Income amnings per share rice per share on December 31, 2019 59,270 14,818 $ 44,452 $ 0.8395 $ 11.00 a. Calculate the indicated ratios for Barry. Do not round intermediate calculations. Round your answers to two decimal places Ratio Barry Industry Average Current 1.88% Quick X 1.29% Days sales outstanding days 42 days Inventory turnover X 6.66% Total assets turnover X 1.89% Profit margin 2.03% ROA 3.82% ROE 8.939 ROIC 7.10% TIE X 3.52% Debt/Total capital 39.98% M/B 4.10 P/E 15.36 EV/EBITDA 8.76 ***** 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 % Profit margin Total assets turnover Equity multiplier INDUSTRY 2.035 1.89 Select the correct option based on Barry's strengths and weaknesses as revealed by your analysis. 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 enf assets turnover ratio is well below the industry average so sales should be increased, assets decreased, or both. While the company's profit m other profitability ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capi below industry averages. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the 11. 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 app as www.thindwedding while the AMARO Select the correct option based on Barry's strengths and weaknesses as revealed by your analysis 1. 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 enforon a more stringent collection polky. The total assets tumover ratio is well below the industry average so sales should be increased, at decreased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios we low compared to the industry - net incorner 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 II. The firm's days sales outstanding ratio is more than twice as long as the industry average Indicating that the firm should loosen creditor apply a less stringent collection policy. The total assets tumover ratio is wel 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 averagn liquidity position and financial leverage is similar to others in the industry, III. The firm's day 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 se sales should be increased, assets decreased, or both. While the company's profit margin 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 TV. The firm's days sales outstanding ratio is more than the Industry average Indicating that the firm should tighten creditorenforon a more stringent collection policy. The total assets turnover ratio is well above the industry average so sales should be increased, es 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. V The firm's days sales outstanding ratio is comparable to the industry average, indicating that the firm should nether tighten credit ner for a more stringent collection policy. The total assets turnover ratio well below the industry average so sales should be increased, ancreased, or both. While the company profit margin is higher than the industry average, 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 d. Suppose Barry had doubled its sales as well as its inventories, accounts receivable, and common culty during 2019. How would that information affect the validity of your ratio analysis (Hint: Think about everages and the effects of rapid growth on ratios if averages are not used Necations are needed.) LY 2019 res a period of normal growth for the firm ratios based on this year torted and comparison between them and industry averages will have little meaning, Potential divestors who look only a 2019 ratios will be misted, and a continuation of normal condition in 2020 could hurt the firm's stock price II. 1 2019 represents a period of normal growth for the firm ratios based on this year will be turate and comparison between there and industry averages will have substantial meaning Potential investors who took only at 2019 rates will be misted, and a return to supermal conditions in 2020 could hurt there's stock price III. I 2019 represents a period of superarmal growth for the firm ratios based on this year will be distorted and a comparison between them and Industry averages will have substantial meaning. Potential investors who look only at 2019 ratios will be well informed and return to normal conditions in 2020 could hurt the firm's stock price TV. If 2019 represents a period of super normal growth for the formation on this war wistorted and a comparison between them and industry everages will have little meaning Potential investors who look only at 2019 ratios will be misted, and a return to normal conditions in 2020 could hurt the firm's stock price V 172019 represents a period of supernormal growth for the firm, ratios based on this year will be accurate and a comparison between them and industry leverages will have substantial meaning. Preto need only look at 2019 to be well informe a return to normal condition in 1920COUNT help the stock price