1. Ratio analysis Data for Barry Computer Co. and its industry averages follow, 1. Calculate the indicated ratios for Barry, 2. Outline Barry's strengths and weaknesses as revealed by your analysis, by indicating on each ratio, whether Barry is higher or lower than the industry average, and write is this good or bad. Barry Computer Company Balance Sheet as of December 31, 2005 (in thousands) Cash $ 0 Receivables 200,000 Inventories 200.000 Total current assets 400,000 Accounts payable $200,000 Notes payable 100,000 Other current liabilities 200.000 Total current liabilities 500,000 Long-term debt 400,000 Common equity 100.000 Total liabilities and equity 1.000.000 600.000 Net fixed assets Total assets 1.000.000 Barry Computer Company: Income Statement for Year Ended December 31, 2005 (in Thousands) Sales $1,000,000 Cost of goods sold Materials 400,000 Labor 300,000 Heat, light, and power 50,000 Heat, light, and power 50,000 Indirect labor 100,000 Depreciation 50.000 900.000 100,000 Gross profit Selling expenses General and administrative expenses Earnings before interest and taxes (EBIT) 60,000 30,000 10.000 Interest expense 10,000 Earnings before taxes (EBT) 0 Federal and state income taxes (40 percent) Net Income O Higher or Lower Good or Industry Ratio Barry Bad Average Current 2.OX Quick 1.3x Days sales outstanding 35 days Inventory turnover 6.7X 2.0X Quick 1.3X Days sales outstanding 35 days Inventory turnover 6.7X Total assets turnover 3.0X Net profit margin 1.2% ROA 3.6% ROE 9.0% Total debt/total assets 60%