$4-23$ RATIO ANALYSIS Data for Barry Computer Co$.$ and its industry averages follow. Th

firm's debt is priced at par, so the market value of its debt equals its book value. Sinc

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, an

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.$)$

Barry Computer Company:

Balance Sheet as of December $31,2021($in thousands$)$Byron Books Inc. recently reported

$

$15$

million

of net income. Its EBIT was

$

$20\mathrm{.}8$

million

$,$ and its tax rate was $25\%.$ What was its interest expense? $($Hint: Write out the headings for an income statement, and fill in the known values. Then divide

$

$15$

million

of net income by

$($

$1$

$-$

T

$)$

$=$

$0\mathrm{.}75$

to find the pretax income. The difference between EBIT and taxable income must be interest expense. Use this same procedure to complete similar problems.$)$