Federal and state income taxes (40%) Net income 45,500 18,200 s 27.300 Industry Average 2.0x 1.3x 35 days 67x 1.0x 12% Ratio Current Quick Barry Days sales outstanding Inventory turnover Total assets turnover Profit margin Calculation is based on a 365-day year 4-23 Ratio analysis Data for Barry Computer Co. and its industry averages follow a. Calculate the indicated ratios for Barry b. Construct the extended Du Pont equation for both Barry and the industry c. Outline Barry's strengths d. Suppose Barry had doubled its sales as well as its inventories, accounts receivable, and weaknesses as revealed by your analysis. and common equity during 2005. How would that information affect the validity of your ratio analysis? (Hint: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed.) Barry Computer Company: Balance Sheet as of December 31, 2005 0n Thousands Cash Receivables 129,000 84,000 117.000 330,000 77,500 Accounts payablie 336,000 655,000 292,.500 Common equity Notes payable Other current liabilities 241.500 Total current assets Total current liabilities Long-term debt Net fixed assets Total assets 947.500 Total liabilities and equity 947.500 Barry Computer Company: Income Statement for Year Ended December 31, 2005 (In Thousands) Sales Cost of goods sold 1,607,500 717,000 453,000 8,000 13,000 41,500 Materials Heat, light, and power Indirect labor Depreciation Gross profit Selling expenses General and administrative expenses 1.392.500 s 215,000 15,000 70,000 24.500 S 45,500 8,200 S 27,300 Earnings before interest and taxes (EBIT Interest expense Earnings before taxes (EBT Federal and state income taxes (40 percent Net income