Data for Barry Computer Cs and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals Rs 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) $100,300 Accounts payable $ 129,90 Cash Receivables Inventories Other current abilities 108,300 422,370 324,900 $855,570 Notes payable to bank 129,960 Total current abilities $368,220 Long-term debt 259,920 Net fixed assets 227,430 Common equity (45,486 shares) 454,860 Total assets $1,083,000 Total liabilities and equity $1,083,000 Barry Comper Company: Income Statement for Year Ended December 31, 2021 (in thousands) Sales $1,900,000 Cost of goods sold Materials $855,000 Labor 418,000 Heat, light, and power $5,000 Indirect labor 171,000 1,539,000 Gross profit $361,000 Selling expenses 228,000 19,000 General and administrative expenses Depreciation 38,000 $76,000 Tamnings before interest and taxes (EBIT) Interest expense 28,591 Earnings before taxes (EST) 47,409 Federal and state income taxes (25%) 11,852 Net income 35,557 Earnings per share 0.7017 Price per share on December 31, 2021 12.00 Total current assets $ S a. Calculate the indicated ratios for Barry. Do not round intermediate calculations. Round your answers to two decimal places. Ratio Barry Industry Average Current 2.33x Quick 1,47x Days sales outstanding Inventory turnover 6.13x Total assets turnover 1.98x Profit margin 1.75% ROA 3.46% ROE 8.32% ROIC 7.10% TIE 2.71X Debt/Total capital % 45.55% M/B 3.20 P/E 18.09 EV/EBITDA 9.31 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 % 1.75% 1.98x Total assets turnover Equity multiplier X X days x x* * *; % % % % x 2 X X X 38 days & Select the correct option based on Barry's strengths and weaknesses as revealed by your analysis. 1. The firm's days sales outstanding ratie 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 se 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. II. 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 se 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 Industry average liquidity position and financial leverage is similar to others in the II. 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 wel 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 IV The fom'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 t 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 mover ratio is well above the 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 financiat leverage is similar to others in the the industry-net industry The free's days sales outstanding ratio is comparable to the industry average, indicating that the firm should nether tighten credit ner enforce a more stringent collection policy. The total assets turniever ratios 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 rates 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 i the industry -Select- t 11 111 TV V 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 analys? (Hint: Think about averages and the growth on ratios if averages are not used. No calculations are needed) have substantial meaning Potential investors wh be distorted and a comparison between them and industry average will have substantial means represents a period of normal growth for the firm, ratios based on this year will be accurate and a comparison between them and industry everages v nly at 2021 ratios will be maled, and a return to supernormal conditions in 2022 stock price 1 represents a period o supernonmal growth for the firm, ratios based on this year -Select- 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 analysis? (ent: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed) 1. I 2021 represents a period of normal growth for the firm, raties based on this year will be accurate and a comparison between them and industry averages will have substantial meaning. Potential investors who lock only at 2021 ratios will be misled, and a return to supernormal conations in 2022 could hurt the firm's stock price 11. I 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, Potential investors who look only at 2021 ratios will be well informed, and a return to normal conditions in 2022 could hurt the firm's stock price. 11. I 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 little meaning Potential investors who look only at 2021 ration will be missed, and a return to normal conditions in 2022 could hurt t the f e firm's stock price tv tr 2021 represents a period of superiormal growth for the firm, ratios based on this year will be accurate and a compenson between them and industry averages will have substantial meaning Potential investis need only look at 2021 ratios to be well informed, and a return to normal conditions in 2022 could help the fisstock price 2021 represents a pentod of normal growth for the firm, raties based on this year will be distorted and a comparison between them and industry averages will have te meaning. Potential investors who look only at 2021 rates will be misled, and a continuation of normal conditions in 2022 could hurt the firm's stock pho Grade It Now Save & Continue CREATE 111 IV Data for Barry Computer Cs and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals Rs 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) $100,300 Accounts payable $ 129,90 Cash Receivables Inventories Other current abilities 108,300 422,370 324,900 $855,570 Notes payable to bank 129,960 Total current abilities $368,220 Long-term debt 259,920 Net fixed assets 227,430 Common equity (45,486 shares) 454,860 Total assets $1,083,000 Total liabilities and equity $1,083,000 Barry Comper Company: Income Statement for Year Ended December 31, 2021 (in thousands) Sales $1,900,000 Cost of goods sold Materials $855,000 Labor 418,000 Heat, light, and power $5,000 Indirect labor 171,000 1,539,000 Gross profit $361,000 Selling expenses 228,000 19,000 General and administrative expenses Depreciation 38,000 $76,000 Tamnings before interest and taxes (EBIT) Interest expense 28,591 Earnings before taxes (EST) 47,409 Federal and state income taxes (25%) 11,852 Net income 35,557 Earnings per share 0.7017 Price per share on December 31, 2021 12.00 Total current assets $ S a. Calculate the indicated ratios for Barry. Do not round intermediate calculations. Round your answers to two decimal places. Ratio Barry Industry Average Current 2.33x Quick 1,47x Days sales outstanding Inventory turnover 6.13x Total assets turnover 1.98x Profit margin 1.75% ROA 3.46% ROE 8.32% ROIC 7.10% TIE 2.71X Debt/Total capital % 45.55% M/B 3.20 P/E 18.09 EV/EBITDA 9.31 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 % 1.75% 1.98x Total assets turnover Equity multiplier X X days x x* * *; % % % % x 2 X X X 38 days & Select the correct option based on Barry's strengths and weaknesses as revealed by your analysis. 1. The firm's days sales outstanding ratie 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 se 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. II. 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 se 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 Industry average liquidity position and financial leverage is similar to others in the II. 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 wel 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 IV The fom'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 t 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 mover ratio is well above the 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 financiat leverage is similar to others in the the industry-net industry The free's days sales outstanding ratio is comparable to the industry average, indicating that the firm should nether tighten credit ner enforce a more stringent collection policy. The total assets turniever ratios 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 rates 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 i the industry -Select- t 11 111 TV V 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 analys? (Hint: Think about averages and the growth on ratios if averages are not used. No calculations are needed) have substantial meaning Potential investors wh be distorted and a comparison between them and industry average will have substantial means represents a period of normal growth for the firm, ratios based on this year will be accurate and a comparison between them and industry everages v nly at 2021 ratios will be maled, and a return to supernormal conditions in 2022 stock price 1 represents a period o supernonmal growth for the firm, ratios based on this year -Select- 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 analysis? (ent: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed) 1. I 2021 represents a period of normal growth for the firm, raties based on this year will be accurate and a comparison between them and industry averages will have substantial meaning. Potential investors who lock only at 2021 ratios will be misled, and a return to supernormal conations in 2022 could hurt the firm's stock price 11. I 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, Potential investors who look only at 2021 ratios will be well informed, and a return to normal conditions in 2022 could hurt the firm's stock price. 11. I 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 little meaning Potential investors who look only at 2021 ration will be missed, and a return to normal conditions in 2022 could hurt t the f e firm's stock price tv tr 2021 represents a period of superiormal growth for the firm, ratios based on this year will be accurate and a compenson between them and industry averages will have substantial meaning Potential investis need only look at 2021 ratios to be well informed, and a return to normal conditions in 2022 could help the fisstock price 2021 represents a pentod of normal growth for the firm, raties based on this year will be distorted and a comparison between them and industry averages will have te meaning. Potential investors who look only at 2021 rates will be misled, and a continuation of normal conditions in 2022 could hurt the firm's stock pho Grade It Now Save & Continue CREATE 111 IV