RATIO ANALYSIS Data for Barry Computer Co. and its industry averages follow. Cal
ID: 2814375 • Letter: R
Question
RATIO ANALYSIS
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.
x
Barry Computer Company: Balance Sheet as of December 31, 2016 (In Thousands) Cash $86,710 Accounts payable $113,390 Receivables 193,430 Other current liabilities 106,720 Inventories 146,740 Notes payable to bank 53,360 Total current assets $426,880 Total current liabilities $273,470 Long-term debt $160,080 Net fixed assets 240,120 Common equity 233,450 Total assets $667,000 Total liabilities and equity $667,000Explanation / Answer
1.current ratio=current asset /current liability
=426880/273470 =1.56
2. Quick ratio =(current asset - inventory) /current liability
=(426880-146740)/273470
=280140/273470 =1.02
3.days sales outstanding =accounts receivable /(annual sales /365)= 193430/(1150000/365)
=193430/3150.68=61.39
4 inventory turnover =cost of goods sold /inventory
=989000/146740
=6.74
5.total asset turnover ratio =net sales /total asset
=1150000/667000=1.72
6.profit margin =net income /net sales*100
=13016/1150000=1.13%
7.roa =net income /total asset*100
=13016/667000=1.95%
8.roe=net income /equity*100
=13016/233450=5.58%
9.roic =NOPAT/INVESTED CAPITAL
=EBIT*(1-TAX RATE) /(LONG TERM DEBT +EQUITY
=34500*(1-0.40)/(160080+233450)
=20700/(393530) =5.26%
10. Tie =ebit/interest expense
=34500/12806= 2.69
11.debt/total capital =debt/(debt +equity
=160080/(160080+233450)
160080/393530
=40.68%
Dupont ratio=profit margin*total asset turnover *equity multiplier
For firm
Profit margin from point 6 is 1.13%
Total asset turnover from point 5 is1. 72
Equity multiplier =total asset /shareholders equity
=667000/233450==2.86
Dupont equation = 0.0113*1.72*2.86 =5.58%
For industry
Roe = profit margin*total asset turnover *equity multiplier
Equity multiplier =5.93/(1.08*1.91)
=5.93/2.06
=2.88
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