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Ratio Barry Computers Industry Averages Current Current Assets/Current Liabilities 1.98 2.0X Quick Current Assets - Inventories/Current Liabilities 1.25 1.3X Days Sales Outstanding Receivables/(Annual Sales/365) 76.3

Ratio Barry Computers Industry Averages
Current Current Assets/Current Liabilities 1.98 2.0X
Quick Current Assets - Inventories/Current Liabilities 1.25 1.3X
Days Sales Outstanding Receivables/(Annual Sales/365) 76.3 35 days
Inventory Turnover Sales/Inventories 6.66 6.7X
Total Assets Turnover Sales/Total Assets 1.70 3.0X
Profit Margin Net Income/Sales 2.3% 1.2%
ROA Net Income/Total Assets 3.9% 3.6%
ROE Net Income/Common Equity 10.2% 9.0%
ROIC EBIT(1-T)Total Invested Capital 7.48% 7.5%
TIE EBIT/Interest Charges 3.33 3.0X
Debt/Total Capital Total Debt/(Total Debt + Equity) 48.5% 47.0%
M/B Market Price/Book Value 1.20 4X
P/E Price per Share/Earnings per Share 11.79 17.86X
EV/EBITDA (Market Value of Equity + Market Value of Total Debt + Market Value of Other Financial Claims - Cash and Equivalents)/EBITDA 6.64 9.00X
Balance Sheet Enter figures below
Cash $77,500
Receivables $336,000
Inventories $241,500
Total Current Assets $655,000
Net Fixed Assets $292,500
Total Assets $947,500
Accounts Payable $129,000
Other Current Liabilities $117,000
Notes Payable to Bank $84,000
Total Current Liabilities $330,000
Long-Term Debt $256,500 Shares Outstanding
Common Equity (36,100 shares) $361,000 36,100
Total Liabilities and Equity $947,500
Income Statement
Sales $1,607,500
Cost of Goods Sold 1,351,000
Materials $717,000
Labor $453,000
Heat, light, and power $68,000
Indirect Labor $113,000
Depreciation $41,500
Gross Profit $256,500
Selling Expenses 115,000
Gen. Admin Expenses $30,000
EBIT $70,000
Interest Expense $21,000
EBT $49,000 Tax Burden
Fed and State Income Taxes (25%) $12,250 25%
Net Income $36,750
Earnings per Share $1.01800
Price per Share $12.00
Book Value (Common Equity/Shares) $10.00

1: Ratio Recommendations

give and develop at least one thorough and detailed recommendation for each ratio that is appropriate for the Barry Computer Company to improve financial performance over time (over the next 3-5 years to meet industry standards).

2: Limitations of Ratio Analysis

provides a thorough and detailed assessment of limitations of the exclusive use of ratio analysis for evaluating financial performance, including any qualitative factors that could also complement the ratio analysis and play an important role in improving financial performance.

Reference and citation

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