Data for Barry Computer Co. and its industry averages follow. Calculate the indi

Question

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

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

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.

Barry Computer Company: Balance Sheet as of December 31, 2016 (In Thousands) Cash $168,480 Accounts payable $318,240 Receivables 542,880 Other current liabilities 187,200 Inventories 468,000 Notes payable to bank 93,600    Total current assets $1,179,360    Total current liabilities $599,040 Long-term debt $374,400 Net fixed assets 692,640 Common equity 898,560 Total assets $1,872,000 Total liabilities and equity $1,872,000

Explanation / Answer

Answer)

Current ratio = Current asset / Current Liability = 1179360 / 599040 =1.96875

Quick Ratio = (Cash + Marketetable Securities ) / Current Liabilities =

=(168480 + 542880 ) / 599040 = 711360 / 599040 = 1.19

Days Sale outstanding = Accounts Receivables / Annual sales / 365 = 542880 / 2600000 / 365 = 76.212

Inventory Turnover = COGS / Total inventory = 2158000/468000 = 4.61

Total Asset turnover = Revenue / Total asset = 2600000 / 1872000 = 1.388

Profit Margin = Net Income / Revenue = 62275 / 2600000 = 2.4%

Return on equity = Net Income / Total equity = 62275 /898560 = 6.931%

ROIC = Net income - dividends / Total Capital = (62275-0) / (898560+374400+93600) = 0.045571

Times interest earned = EBIT / Interest charges = 130000 / 26208 = 4.96

Debt / Capital = (374400+93600) / (898560+374400+93600) = 0.3424

Due point for Firm

Profit Margin = Net Income / Revenue = 62275 / 2600000 = 2.4%

Total Asset turnover = Revenue / Total asset = 2600000 / 1872000 = 1.3888

Equity Multiplier = Total asset / Total equity = 1872000/898560 = 2.0833

Due point for Industry

Return on equity = Profit margin x Total assset turnover x Equity Multiplier

7.70% = 2.24% x 1.56 x Equity Multiplier

Equity Multiplier = 2.203

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