Data for Barry Computer Company and its industry averages follow.

a. Calculate the indicated ratios for Barry.

b. Construct the extended Du Pont equation for both Barry and the industry.

c. Outline Barry's strengths and weaknesses as revealed by your analysis.

d. Suppose Barry had doubled its sales as well as its inventories, accounts receivable, and common equity during 2004. How would that information affect the validity of your ratio analysis? Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed.

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Barry Computer Company: Balance Sheet as of December 31, 2004 (In Thousands) $ 77,500 Cash Acconnes payable Notes payable $129,000 Receivables 336,000 84,000 Inventories 241,500 $655,000 Other current liabilities 117,000 $330,000 Total current assets Total current liabilitics Net fixed assets Long-term debt 292,500 256,500 Common equity Total liabilities and equity 361,000 $947,500 $947,500 Total assets Barry Computer Company: Income Statement for Year Ended December 31, 2004 (In Thousands) Sales $1,607,500 1,392,500 145,000 $ 70,000 Cost of goods sold Selling, general, and administrative expenses Earnings before interest and taxes (EBIT) Interest expense 24.500 $ 45,500 Earnings before taxes (EBT) Federal and state income taxes (40%) 18,200 $ 27,300 Net income Ratio Barry Industry Average Current assets/current liabilities Days sales outstanding Sales/inventory Sales/fixed assets 2.0x 35 days 6.7x 12.1x Sales/total assets 3.0x Net income/sales 1.2% 3.6% 9.0% Net income/total assets Net income/common equity Total debtitotal assets 60.0% *Calculation is based on a 365-day year.