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

Question

Data for Barry Computer Co. and its industry averages follow Barry Computer Company: Balance Sheet as of December 31, 2016 (In Thousands) $163,350 207,900 103,950 Total current liabilities $475,200 $311,850 697,950 Total liabilities and equity $1,485,000 Cash Receivables Inventories $178,200 534,600 326,700 $1,039,500 Accounts payable Other current liabilities Notes payable to bank Total current assets Long-term debt Net fixed assets 445,500 Common equity Total assets $1,485,000 Barry Computer Company: Income Statement for Year Ended December 31, 2016 (In Thousands) Sales $2,700,000 Cost of goods sold Materials Labor Heat, light, and power Indirect labor Depreciation $1,269,000 648,000 135,000 108,000 108,000 2,268,000 $ 432,000 270,000 54,000 $108,000 34,304 $73,696 29,478 $44,218 Gross profit Selling expenses General and administrative expenses Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Federal and state income taxes (40%) Net income

Explanation / Answer

c. 1st option is correct

d. Third option is correct

Ratios Formula Barry Current ratio =Current Assets/Current Liabilities 2.2x Acide test ratio =(Current assets - stocks)/Current liabilities 1.5x Days Sales Outstanding 365/(Sales/Accounts recievables) 72.27 Inventory turnover ratio =COGS/Inventory 1.3x Total Assets Turnover =Revenue/Total Assets 1.8x Profit Margin =Net Income/ Revenue 1.64% ROA (Return on Assets) =Net Income/ Total Assets 2.98% ROE (Return on Equity) =Net Income/Total Equity 6.34% Return on Invested Capital (ROIC) =Net Income/(Total Equity + Long term debt + Notes payable) 3.97% Times interest earned =EBITDA/Interest expense 6.3x Debt to Total Capital =(Long term debt + Notes payable)/(Total Equity + Long term debt + Notes payable) 37.33% Du Pont Equation Net income Margin =Net Income/ Revenue 1.64% Total Assets Turnover =Revenue/Total Assets 1.8x Equity Multiplier =Total Assets/ Total Equity 2.1x

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