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Cash $ 77,500 Accounts payable $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 292,500 Common equity (36,100 shares) 361,000 Total assets $ 947,500 Total liabilities and equity $947,500 Barry Computer Company: Income Statement for Year Ended December 31, 2019 (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 21,000 Earnings before taxes (EBT) 49,000 Federal and state income taxes (25%) 12,250 Net income 36,750 Earnings per share 1.018 %24 Earnings per share 1.018 Price per share on December 31, 2019 12.00 Ratio Barry Industry Average Current 2.0X Quick 1.3X Days sales outstanding 35 days Inventory turnover 6.7X Total assets turnover 3.0X Profit margin 1.6% ROA 4.8% ROE 12.1% ROIC 9.4% TIE 3.5X Debt/Total capital 47.0% M/B 4.22X P/E 13.27 EV/EBITDA 9.14 aCalculation is based on 365-day year. %24

Cash $ 77,500 Accounts payable $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 292,500 Common equity (36,100 shares) 361,000 Total assets $ 947,500 Total liabilities and equity $947,500 Barry Computer Company: Income Statement for Year Ended December 31, 2019 (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 21,000 Earnings before taxes (EBT) 49,000 Federal and state income taxes (25%) 12,250 Net income 36,750 Earnings per share 1.018 %24 Earnings per share 1.018 Price per share on December 31, 2019 12.00 Ratio Barry Industry Average Current 2.0X Quick 1.3X Days sales outstanding 35 days Inventory turnover 6.7X Total assets turnover 3.0X Profit margin 1.6% ROA 4.8% ROE 12.1% ROIC 9.4% TIE 3.5X Debt/Total capital 47.0% M/B 4.22X P/E 13.27 EV/EBITDA 9.14 aCalculation is based on 365-day year. %24

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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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
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 2019. 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, 2019 (in Thousands)

Cash $ 77,500 Accounts payable $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 292,500 Common equity (36,100 shares) 361,000 Total assets $ 947,500 Total liabilities and equity $947,500 Barry Computer Company: Income Statement for Year Ended December 31, 2019 (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 21,000 Earnings before taxes (EBT) 49,000 Federal and state income taxes (25%) 12,250 Net income 36,750 Earnings per share 1.018 %24
Transcribed Image Text:Cash $ 77,500 Accounts payable $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 292,500 Common equity (36,100 shares) 361,000 Total assets $ 947,500 Total liabilities and equity $947,500 Barry Computer Company: Income Statement for Year Ended December 31, 2019 (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 21,000 Earnings before taxes (EBT) 49,000 Federal and state income taxes (25%) 12,250 Net income 36,750 Earnings per share 1.018 %24
Earnings per share 1.018 Price per share on December 31, 2019 12.00 Ratio Barry Industry Average Current 2.0X Quick 1.3X Days sales outstanding 35 days Inventory turnover 6.7X Total assets turnover 3.0X Profit margin 1.6% ROA 4.8% ROE 12.1% ROIC 9.4% TIE 3.5X Debt/Total capital 47.0% M/B 4.22X P/E 13.27 EV/EBITDA 9.14 aCalculation is based on 365-day year. %24
Transcribed Image Text:Earnings per share 1.018 Price per share on December 31, 2019 12.00 Ratio Barry Industry Average Current 2.0X Quick 1.3X Days sales outstanding 35 days Inventory turnover 6.7X Total assets turnover 3.0X Profit margin 1.6% ROA 4.8% ROE 12.1% ROIC 9.4% TIE 3.5X Debt/Total capital 47.0% M/B 4.22X P/E 13.27 EV/EBITDA 9.14 aCalculation is based on 365-day year. %24
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