Data for Barry Computer Co. and its industry averages follow. The firm’s debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, the number of shares is shown in thousands too.

a. Calculate the indicated ratios for Barry.

b. Construct the DuPont 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 2021. How would that information affect the validity of your ratio analysis? (Hint: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed.)

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Cash Receivables Inventories Barry Computer Company: Balance Sheet as of December 31, 2021 (in thousands) $ 77,500 Accounts payable Other current liabilities Notes payable to bank Total current liabilities Total current assets Net fixed assets Total assets 336,000 241,500 $ 655,000 292,500 $ 947,500 Long-term debt Common equity (36,100 shares) Total liabilities and equity $129,000 117,000 84,000 $330,000 256,500 361,000 $947,500