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Ваrry Computer Company: Balance Sheet as of December 31, 2016 (in Thousands) $ 77,500 Cash Accounts payable $129,000 Receivables 336,000 241,500 Other current liabilities 117,000 84,000 Inventories Notes payable to bank $330,000 256,500 Total current assets $655,000 Total current liabilities 292 500 $947 500 Long-term debt Common equity Total liabilities and equity Net fixed assets 361,000 $947,500 Total assets Barry Computer Company: Income Statement for Year Ended December 31, 2016 (in Thous ands) 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 Gross profit 41,500 1392500 $ 215,000 Selling expenses General and administrative expenses 115,000 30,000 70,000 24 500 $ 45,500 18 200 27 300 Eamings before interest and taxes (EBIT) Interest expense Eamings before taxes (EBT) Federal and state income taxes (40%) Net income Ratio Barry Industry Average Current 2.0x Quick 1.3x Days sales outstanding Inventory tumover 35 days 6.7x Total assets turnover 3.0x Profit margin 1.2% ROA 3.6% ROE 9.0% ROIC 7.5% TIE 3.0x Debt/Total capital 47.0% "Calculation is based on a 365-day year. ||

Ваrry Computer Company: Balance Sheet as of December 31, 2016 (in Thousands) $ 77,500 Cash Accounts payable $129,000 Receivables 336,000 241,500 Other current liabilities 117,000 84,000 Inventories Notes payable to bank $330,000 256,500 Total current assets $655,000 Total current liabilities 292 500 $947 500 Long-term debt Common equity Total liabilities and equity Net fixed assets 361,000 $947,500 Total assets Barry Computer Company: Income Statement for Year Ended December 31, 2016 (in Thous ands) 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 Gross profit 41,500 1392500 $ 215,000 Selling expenses General and administrative expenses 115,000 30,000 70,000 24 500 $ 45,500 18 200 27 300 Eamings before interest and taxes (EBIT) Interest expense Eamings before taxes (EBT) Federal and state income taxes (40%) Net income Ratio Barry Industry Average Current 2.0x Quick 1.3x Days sales outstanding Inventory tumover 35 days 6.7x Total assets turnover 3.0x Profit margin 1.2% ROA 3.6% ROE 9.0% ROIC 7.5% TIE 3.0x Debt/Total capital 47.0% "Calculation is based on a 365-day year. ||

FINANCIAL ACCOUNTING
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.
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 2016. 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.)

Ваrry Computer Company: Balance Sheet as of December 31, 2016 (in Thousands) $ 77,500 Cash Accounts payable $129,000 Receivables 336,000 241,500 Other current liabilities 117,000 84,000 Inventories Notes payable to bank $330,000 256,500 Total current assets $655,000 Total current liabilities 292 500 $947 500 Long-term debt Common equity Total liabilities and equity Net fixed assets 361,000 $947,500 Total assets Barry Computer Company: Income Statement for Year Ended December 31, 2016 (in Thous ands) 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 Gross profit 41,500 1392500 $ 215,000 Selling expenses General and administrative expenses 115,000 30,000 70,000 24 500 $ 45,500 18 200 27 300 Eamings before interest and taxes (EBIT) Interest expense Eamings before taxes (EBT) Federal and state income taxes (40%) Net income
Transcribed Image Text:Ваrry Computer Company: Balance Sheet as of December 31, 2016 (in Thousands) $ 77,500 Cash Accounts payable $129,000 Receivables 336,000 241,500 Other current liabilities 117,000 84,000 Inventories Notes payable to bank $330,000 256,500 Total current assets $655,000 Total current liabilities 292 500 $947 500 Long-term debt Common equity Total liabilities and equity Net fixed assets 361,000 $947,500 Total assets Barry Computer Company: Income Statement for Year Ended December 31, 2016 (in Thous ands) 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 Gross profit 41,500 1392500 $ 215,000 Selling expenses General and administrative expenses 115,000 30,000 70,000 24 500 $ 45,500 18 200 27 300 Eamings before interest and taxes (EBIT) Interest expense Eamings before taxes (EBT) Federal and state income taxes (40%) Net income
Ratio Barry Industry Average Current 2.0x Quick 1.3x Days sales outstanding Inventory tumover 35 days 6.7x Total assets turnover 3.0x Profit margin 1.2% ROA 3.6% ROE 9.0% ROIC 7.5% TIE 3.0x Debt/Total capital 47.0% "Calculation is based on a 365-day year. ||
Transcribed Image Text:Ratio Barry Industry Average Current 2.0x Quick 1.3x Days sales outstanding Inventory tumover 35 days 6.7x Total assets turnover 3.0x Profit margin 1.2% ROA 3.6% ROE 9.0% ROIC 7.5% TIE 3.0x Debt/Total capital 47.0% "Calculation is based on a 365-day year. ||
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