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 extended Du Pont equation for both Barry and the industry. Round your answers to two decimal places.

Barry Computer Company: Balance Sheet as of December 31, 2012 (In Thousands) Cash $159,750 Accounts payable $191,700 Receivables 559,125 Notes payable 95,850 Inventories 415,350 Other current liabilities 127,800    Total current assets $1,134,225    Total current liabilities $415,350 Long-term debt $479,250 Net fixed assets 463,275 Common equity 702,900 Total assets $1,597,500 Total liabilities and equity $1,597,500

Explanation / Answer

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

Current ratio =  Total current assets/Total current liabilities

Current ratio = 1134225/415350

Current ratio = 2.73

Quick ratio = (Cash + Receivables)/Total current liabilities

Quick ratio = (159750+559125)/415350

Quick ratio = 1.73

Days sales outstanding = Receivables/Sales * 365

Days sales outstanding = 559125/2250000*365

Days sales outstanding = 90.70 Days

Inventory turnover = COGS/Inventory

Inventory turnover = 1845000/415350

Inventory turnover = 4.44

Total assets turnover = Sales/Total assets

Total assets turnover = 2250000/1597500

Total assets turnover = 1.41

Net profit margin = Net income/Sale

Net profit margin = 41620/2250000

Net profit margin = 1.85%

ROA= Net income/Total Asset

ROA = 41620/1597500

ROA =2.61%

ROE = Net Income/Equity

ROE = 41620/702900

ROE = 5.92%

Total debt/total assets = Total debt/total assets

Total debt/total assets = (415350+479250)/1597500

Total debt/total assets = 56%

Construct the extended Du Pont equation for both Barry and the industry. Round your answers to two decimal places.

FIRM

Equity multiplier = ROE/(Net profit margin*Total assets turnover)

Equity multiplier = 5.92%/(1.85%*1.41)

Equity multiplier = 2.27

Industry

Equity multiplier = ROE/(Net profit margin*Total assets turnover)

Equity multiplier = 6.30%/(1.73%*1.59)

Equity multiplier = 2.29

FIRM INDUSTRY Net profit margin 1.85% 1.73% Total assets turnover 1.41x 1.59x Equity multiplier 2.27 2.29

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