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. Barry Computer Company: Balance Sheet as of December 31, 2018 (In Thousands) Cash $86,400 Accounts payable $259,200 Receivables 501,120 Other current liabilities 241,920 Inventories 397,440 Notes payable to bank 103,680 Total current assets $984,960 Total current liabilities $604,800 Long-term debt $362,880 Net fixed assets 743,040 Common equity (76,032 shares) 760,320 Total assets $1,728,000 Total liabilities and equity $1,728,000 Barry Computer Company: Income Statement for Year Ended December 31, 2018 (In Thousands) Sales $2,700,000 Cost of goods sold Materials $1,107,000 Labor 594,000 Heat, light, and power 189,000 Indirect labor 270,000 Depreciation 81,000 2,241,000 Gross profit $ 459,000 Selling expenses 324,000 General and administrative expenses $ 81,000 Earnings before interest and taxes (EBIT) $ 54,000 Interest expense 36,288 Earnings before taxes (EBT) $ 17,712 Federal and state income taxes (40%) 7,085 Net income $ 10,627 Earnings per share $ 0.13977 Price per share on December 31, 2018 $ 14.00 Calculate the indicated ratios for Barry. Round your answers to two decimal places. Ratio Barry Industry Average Current x 1.56x Quick x 0.92x Days sales outstandinga days 31.66 days

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.

Barry Computer Company:
Balance Sheet as of December 31, 2018 (In Thousands)

Cash	$86,400	Accounts payable	$259,200
Receivables	501,120	Other current liabilities	241,920
Inventories	397,440	Notes payable to bank	103,680
Total current assets	$984,960	Total current liabilities	$604,800
		Long-term debt	$362,880
Net fixed assets	743,040	Common equity (76,032 shares)	760,320
Total assets	$1,728,000	Total liabilities and equity	$1,728,000

Barry Computer Company: Income Statement for Year Ended December 31, 2018 (In Thousands)

Sales		$2,700,000
Cost of goods sold
Materials	$1,107,000
Labor	594,000
Heat, light, and power	189,000
Indirect labor	270,000
Depreciation	81,000	2,241,000

Gross profit	$	459,000
Selling expenses		324,000
General and administrative expenses	$	81,000
Earnings before interest and taxes (EBIT)	$	54,000
Interest expense		36,288
Earnings before taxes (EBT)	$	17,712
Federal and state income taxes (40%)		7,085
Net income	$	10,627
Earnings per share	$	0.13977
Price per share on December 31, 2018	$	14.00

Calculate the indicated ratios for Barry. Round your answers to two decimal places.

Ratio	Barry	Industry Average
Current	x	1.56x
Quick	x	0.92x
Days sales outstanding^a	days	31.66 days
Inventory turnover	x	7.13x
Total assets turnover	x	1.76x
Profit margin	%	0.37%
ROA	%	0.65%
ROE	%	1.55%
ROIC	%	7.20%
TIE	x	1.59x
Debt/Total capital	%	38.93%
M/B	%	4.40%
P/E	%	102.40%
EV/EBITDA	%	13.02%

^aCalculation is based on a 365-day year.

Construct the DuPont equation for both Barry and the industry. Round your answers to two decimal places.

FIRM INDUSTRY

Profit margin % 0.37%

Total assets turnover x 1.76x

Equity multiplier x x

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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