Problem 4-23
Ratio Analysis
Data for Barry Computer Co. and its industry averages follow.
| Barry Computer Company: |
| Balance Sheet as of December 31, 2014 (In Thousands) |
| Cash |
$142,290 |
Accounts payable |
$158,100 |
| Receivables |
632,400 |
Other current liabilities |
142,290 |
| Inventories |
379,440 |
Notes payable |
79,050 |
| Total current assets |
$1,154,130 |
Total current liabilities |
$379,440 |
| Long-term debt |
$316,200 |
| Net fixed assets |
426,870 |
Common equity |
885,360 |
| Total assets |
$1,581,000 |
Total liabilities and equity |
$1,581,000 |
Calculate the indicated ratios for Barry. Round your answers to two decimal places.
Barry Computer Company:
Income Statement for Year Ended December 31, 2014 (In Thousands) |
| Sales |
$2,550,000 |
| Cost of goods sold |
| Materials |
$1,045,500 |
| Labor |
739,500 |
| Heat, light, and power |
127,500 |
| Indirect labor |
229,500 |
| Depreciation |
127,500 |
$2,269,500 |
Calculation is based on a 365-day year.
| Gross profit |
$280,500 |
| Selling expenses |
127,500 |
| General and administrative expenses |
76,500 |
| Earnings before interest and taxes (EBIT) |
$76,500 |
| Interest expense |
37,944 |
| Earnings before taxes (EBT) |
38,556 |
| Federal and state income taxes (40%) |
15,422 |
| Net income |
$23,134 |
| Ratio |
Barry |
Industry Average |
| Current |
______x |
3.01x |
| Quick |
_______x |
2.02x |
| Days sales outstandinga |
_______days |
42.30days |
| Inventory turnover |
_______x |
7.05x |
| Total assets turnover |
_______x |
1.82x |
| Profit margin |
______% |
0.85% |
| ROA |
______% |
1.54% |
| ROE |
______ % |
2.90% |
| ROIC |
_____ % |
7.40% |
| TIE |
_____x |
3.10x |
| Debt/Total capital |
______ % |
48.50% |
Construct the Du Pont equation for both Barry and the industry. Round your answers to two decimal places.
| FIRM |
INDUSTRY |
|
| Profit margin |
____% |
0.85 |
| Total assets turnover |
_____ x |
1.82x |
| Equity multiplier |
_______
|
|