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Barry Computer Company: Balance Sheet as of December 31, 2018 (In Thousands) $ 77,500 Accounts payable Cash $129,000 Receivables 336,000 Other current liabilities 117,000 Inventories 241,500 Notes payable to bank 84,000 Total current assets $ 655,000 Total current liabilities $330,000 Long-term debt 256,500 Net fixed assets Common equity (36,100 shares) Total liabilities and equity 292,500 361,000 Total assets $ 947,500 $947,500 December 31, 2018 (In Thousands) Sales $1,607,500 Cost of goods sold Materials $717,000 Labor 453,000 Heat, light, and power 68,000 Indirect labor 113,000 Depreciation 41,500 1,392,500 Gross profit $ 215,000 Selling expenses 115,000 General and administrative expenses 30,000 Earnings before interest and taxes (EBIT) 70,000 Interest expense 24,500 Earnings before taxes (EBT) 45,500 Federal and state income taxes (40%) 18,200 Net income 27,300 Earmings per share 0.75623 Price per share on December 31, 2018 $ 12.00 Ratio Barry Industry Average Current 2.0x Quick 1.3x Days sales outstanding Inventory turnover 35 days 6.7x Total assets turnover 3.0x Profit margin 1.2% ROA 3.6% ROE 9.0% ROIC 7.5% TIE 3.0х Debt/Total capital 47.0% M/B 4.22 P/E 17.86 EV/EBITDA 9.14 Calculation is based on a 365-day year.

Barry Computer Company: Balance Sheet as of December 31, 2018 (In Thousands) $ 77,500 Accounts payable Cash $129,000 Receivables 336,000 Other current liabilities 117,000 Inventories 241,500 Notes payable to bank 84,000 Total current assets $ 655,000 Total current liabilities $330,000 Long-term debt 256,500 Net fixed assets Common equity (36,100 shares) Total liabilities and equity 292,500 361,000 Total assets $ 947,500 $947,500 December 31, 2018 (In Thousands) Sales $1,607,500 Cost of goods sold Materials $717,000 Labor 453,000 Heat, light, and power 68,000 Indirect labor 113,000 Depreciation 41,500 1,392,500 Gross profit $ 215,000 Selling expenses 115,000 General and administrative expenses 30,000 Earnings before interest and taxes (EBIT) 70,000 Interest expense 24,500 Earnings before taxes (EBT) 45,500 Federal and state income taxes (40%) 18,200 Net income 27,300 Earmings per share 0.75623 Price per share on December 31, 2018 $ 12.00 Ratio Barry Industry Average Current 2.0x Quick 1.3x Days sales outstanding Inventory turnover 35 days 6.7x Total assets turnover 3.0x Profit margin 1.2% ROA 3.6% ROE 9.0% ROIC 7.5% TIE 3.0х Debt/Total capital 47.0% M/B 4.22 P/E 17.86 EV/EBITDA 9.14 Calculation is based on a 365-day year.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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 dollars
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.)

Barry Computer Company: Balance Sheet as of December 31, 2018 (In Thousands) $ 77,500 Accounts payable Cash $129,000 Receivables 336,000 Other current liabilities 117,000 Inventories 241,500 Notes payable to bank 84,000 Total current assets $ 655,000 Total current liabilities $330,000 Long-term debt 256,500 Net fixed assets Common equity (36,100 shares) Total liabilities and equity 292,500 361,000 Total assets $ 947,500 $947,500 December 31, 2018 (In Thousands) Sales $1,607,500 Cost of goods sold Materials $717,000 Labor 453,000 Heat, light, and power 68,000 Indirect labor 113,000 Depreciation 41,500 1,392,500 Gross profit $ 215,000 Selling expenses 115,000 General and administrative expenses 30,000 Earnings before interest and taxes (EBIT) 70,000 Interest expense 24,500 Earnings before taxes (EBT) 45,500 Federal and state income taxes (40%) 18,200 Net income 27,300 Earmings per share 0.75623 Price per share on December 31, 2018 $ 12.00 Ratio Barry Industry Average Current 2.0x Quick 1.3x Days sales outstanding Inventory turnover 35 days 6.7x Total assets turnover 3.0x Profit margin 1.2% ROA 3.6% ROE 9.0% ROIC 7.5% TIE 3.0х Debt/Total capital 47.0% M/B 4.22 P/E 17.86 EV/EBITDA 9.14 Calculation is based on a 365-day year.
Transcribed Image Text:Barry Computer Company: Balance Sheet as of December 31, 2018 (In Thousands) $ 77,500 Accounts payable Cash $129,000 Receivables 336,000 Other current liabilities 117,000 Inventories 241,500 Notes payable to bank 84,000 Total current assets $ 655,000 Total current liabilities $330,000 Long-term debt 256,500 Net fixed assets Common equity (36,100 shares) Total liabilities and equity 292,500 361,000 Total assets $ 947,500 $947,500 December 31, 2018 (In Thousands) Sales $1,607,500 Cost of goods sold Materials $717,000 Labor 453,000 Heat, light, and power 68,000 Indirect labor 113,000 Depreciation 41,500 1,392,500 Gross profit $ 215,000 Selling expenses 115,000 General and administrative expenses 30,000 Earnings before interest and taxes (EBIT) 70,000 Interest expense 24,500 Earnings before taxes (EBT) 45,500 Federal and state income taxes (40%) 18,200 Net income 27,300 Earmings per share 0.75623 Price per share on December 31, 2018 $ 12.00 Ratio Barry Industry Average Current 2.0x Quick 1.3x Days sales outstanding Inventory turnover 35 days 6.7x Total assets turnover 3.0x Profit margin 1.2% ROA 3.6% ROE 9.0% ROIC 7.5% TIE 3.0х Debt/Total capital 47.0% M/B 4.22 P/E 17.86 EV/EBITDA 9.14 Calculation is based on a 365-day year.
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