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Category > Business & Finance Posted 30 May 2017 My Price 12.00

Ratio Analysis

Problem 4-22
Ratio Analysis

Data for Barry Computer Co. and its industry averages follow.

 

Barry Computer Company:
Balance Sheet as of December 31, 2011 (In Thousands)
 
Cash $100,800   Accounts payable $100,800
Receivables 201,600   Notes payable 57,600
Inventories 144,000   Other current liabilities 64,800
Total current assets $446,400   Total current liabilities $223,200
      Long-term debt $144,000
Net fixed assets 273,600   Common equity 352,800
Total assets $720,000   Total liabilities and equity $720,000

 

 

Barry Computer Company:
Income Statement for Year Ended December 31, 2011 (In Thousands)
 
Sales     $1,000,000
Cost of goods sold      
Materials $410,000    
Labor 220,000    
Heat, light, and power 40,000    
Indirect labor 110,000    
Depreciation 30,000   $810,000
Gross profit   $190,000
Selling expenses   50,000
General and administrative expenses   10,000
Earnings before interest and taxes (EBIT)   $130,000
Interest expense   17,280
Earnings before taxes (EBT)   112,720
Federal and state income taxes (40%)   45,088
Net income   $67,632

 

 

  1. Calculate the indicated ratios for Barry. Round your answers to two decimal places.
    Ratio Barry Industry Average
    Current x 1.90x
    Quick x 1.29x
    Days sales outstandinga days 35.04days
    Inventory turnover x 7.44x
    Total assets turnover x 1.62x
    Net profit margin % 6.44%
    ROA % 10.44%
    ROE % 21.30%
    Total debt/total assets % 50.98%

    aCalculation is based on a 365-day year.

  2. Construct the extended Du Pont equation for both Barry and the industry. Round your answers to two decimal places.
      FIRM INDUSTRY
    Net profit margin % 6.44%
    Total assets turnover x 1.62x
    Equity multiplier  

 

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Status NEW Posted 30 May 2017 04:05 AM My Price 12.00

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