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 $123,525 Accounts payable $219,600 Receivables 494,100 Other current liabilities 164,700 Inventories 329,400 Notes payable to bank 150,975 Total current assets $947,025 Total current liabilities $535,275 Long-term debt $384,300 Net fixed assets 425,475 Common equity (45,292.5 shares) 452,925 Total assets $1,372,500 Total liabilities and equity $1,372,500 Barry Computer Company: Income Statement for Year Ended December 31, 2018 (In Thousands) Sales $2,250,000 Cost of goods sold Materials $1,102,500 Labor 450,000 Heat, light, and power 90,000 Indirect labor 180,000 Depreciation 67,500 1,890,000 Gross profit $ 360,000 Selling expenses 225,000 General and administrative expenses $ 45,000 Earnings before interest and taxes (EBIT) $ 90,000 Interest expense 42,273 Earnings before taxes (EBT) $ 47,727 Federal and state income taxes (40%) 19,091 Net income $ 28,636 Earnings per share $ 0.63225 Price per share on December 31, 2018 $ 10.00

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter6: Receivables And Inventories

Section: Chapter Questions

Problem 6.2MBA: Allowance method Using transactions listed in £6-S. indicate the effects of each transaction on the...

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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	$123,525	Accounts payable	$219,600
Receivables	494,100	Other current liabilities	164,700
Inventories	329,400	Notes payable to bank	150,975
Total current assets	$947,025	Total current liabilities	$535,275
		Long-term debt	$384,300
Net fixed assets	425,475	Common equity (45,292.5 shares)	452,925
Total assets	$1,372,500	Total liabilities and equity	$1,372,500

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

Sales		$2,250,000
Cost of goods sold
Materials	$1,102,500
Labor	450,000
Heat, light, and power	90,000
Indirect labor	180,000
Depreciation	67,500	1,890,000

Gross profit	$	360,000
Selling expenses		225,000
General and administrative expenses	$	45,000
Earnings before interest and taxes (EBIT)	$	90,000
Interest expense		42,273
Earnings before taxes (EBT)	$	47,727
Federal and state income taxes (40%)		19,091
Net income	$	28,636
Earnings per share	$	0.63225
Price per share on December 31, 2018	$	10.00

a. Calculate the indicated ratios for Barry. Round your answers to two decimal places.
Ratio
Barry
Industry Average
Current
1.78x
Quick
1.09x
Days sales outstanding
days
38.17 days
Inventory turnover
7.32x
Total assets turnover
1.81x
Profit margin
%
1.21%
ROA
%
2.20%
ROF
%
6.73%
ROIC
7.50%
TIE
2.23x
Debt/Total capital
55.07%
M/B
%
4.00%
P/E
%
18.17%
EV/EBITDA
7.77%
*Calculalion is based on a 365-day year.
b. Construct the DuPont equation for both Barry and the industry. Round your answers to two decimal places.
FIRM
INDUSTRY
Proſil margin
1.21%
Total assets turnover
1.81x
Equity multiplier

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