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Ratiod analyis 4-23 RATIO ANALYSIS Data for Barry Computer Co, and its industry averages follow. The firm's debt is priced at par, so the market
Ratiod analyis
4-23 RATIO ANALYSIS Data for Barry Computer Co, and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dol. lars are in thousands, number of shares are shown in thousands too. a. Calculate the indicated ratios for Barry b. Construct the DuPont equation for both Barry and the industry e Outline Barry's strengths and weaknesses as revealed by your analysis d. Suppose Barry had doubled its sales as well as its inventories, accounts receivable, and common equity during 2016. How would that information affect the validity of your rato 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, 2018 (in Thousandal Cash 5 77.500 Accounts payable Receivable 336000 Other current liabilities Inventories 241,500 Notes payable to bank Total current asset $655.000 Total current les Long term die Net fed et 292,500 Common equity 06, 100 share Total 5042.500 Tobties and $12000 117.000 34000 5330000 256,500 361,000 1942,500 Barry Computer Company Income Soment for Your Indod December 3, 2018 in Thomas Sales $1,507500 Cost of goods sold Materials $717000 Labor 63000 Heat, light, and power 68.000 Indirect labor 113000 Depreciation 41.500 1392500 Gross profit 215,000 Selling expenses 115.000 General and administrative expenses 30000 Earnings before interest and taxes BT) $ 70,000 Interest expense 20500 Earnings before taxes ET) $ 45.500 Federal and state income takes 40 18.200 Net income 27300 Earnings per share Price per share on December 31, 2018 $ 075623 5 12.00 Ratio Barry Industry Average 201 Current Quick Dayssas outstanding Inventory tumor Totale turnove 35 67 30% Promega HOA 16 90 ROE ROC TE 754 30 4704 Det/Total capit M PE VALITOA 914 bedo ayye ere hdd $1.407,500 $71700 DOO 68 DOG 113.000 41500 Dey Computer Compone December 31, 2018 in The Sales Cost of goods sold Materials Libor Heat, light and power Indirect labor Depreciation Gros proft Selling expenses General and administrative expenses Earnings before interest and taxes EBT) Interest expense Earnings before taxes (EBT) Federal and state income taxes (40 Net income 1392.500 $ 215.000 115,000 30.000 5 70.000 24500 $ 45.500 18.200 27.300 Earnings per share Price per share on December 31, 2018 5 0.753 $ 12.00 Ratio Barry Industry Average 20% 13 x Current 35 days Quick Days sales outstanding Inventory turnover Total assets turnover 67% 30x 12 Profit margin ROA ROE 90% 75 30X ROIC TIE 470% Debt/Total capital MB 1786 916 PE EVEBITDA Calculation is based on a 35-day yea in recent years. Per Total assets $300000 Total liabilities and equity Cost of goods sold Sales 4-23 RATIO ANALYSIS Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dol- lars are in thousands, number of shares are shown in thousands too. a. Calculate the indicated ratios for Barry b. Construct the DuPont equation for both Barry and the industry c Outline Barry's strengths and weaknesses as revealed by your analysis d. Suppose Barry had doubled its sales as well as its inventories, accounts receivable, and common equity during 2018. 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.) $129000 117,000 Barry Computer Company: Balance Sheet as of December 31, 2018 in Thousands) Cash $ 77,500 Accounts payable Receivables 336000 Other current liabilities 241.500 Notes payable to bank Totalcument assets 5655.000 total current liabilities Long-term debt 292.500 Common equity 06,100 share Tout 5942.500 Total abilities and equity $330000 256,500 361.000 $947.500
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