4.14

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, number of shares are shown in thousands too.

Barry Computer Company:
Balance Sheet as of December 31, 2019 (In Thousands)
Cash	$	176,800		Accounts payable	$	194,480
Receivables		689,520		Other current liabilities		229,840
Inventories		442,000		Notes payable to bank		176,800
Total current assets	$	1,308,320		Total current liabilities	$	601,120
				Long-term debt		442,000
Net fixed assets		459,680		Common equity (72,488 shares)		724,880
Total assets	$	1,768,000		Total liabilities and equity	$	1,768,000

Barry Computer Company: Income Statement for Year Ended December 31, 2019 (In Thousands)
Sales			$	2,600,000
Cost of goods sold
Materials	$1,066,000
Labor	598,000
Heat, light, and power	78,000
Indirect labor	286,000
Depreciation	104,000			2,132,000

Gross profit		$	468,000
Selling expenses			286,000
General and administrative expenses			78,000
Earnings before interest and taxes (EBIT)		$	104,000
Interest expense			48,620
Earnings before taxes (EBT)		$	55,380
Federal and state income taxes (25%)			13,845
Net income		$	41,535
Earnings per share		$	0.5730
Price per share on December 31, 2019		$	10.00

1. Calculate the indicated ratios for Barry. Do not round intermediate calculations. Round your answers to two decimal places.

   Ratio	Barry	Industry Average
   Current		2.13
   Quick		1.39
   Days sales outstandinga	days	45	days
   Inventory turnover		6.17
   Total assets turnover		1.75
   Profit margin	%	1.49	%
   ROA	%	2.61	%
   ROE	%	6.10	%
   ROIC	%	8.00	%
   TIE		2.17
   Debt/Total capital	%	44.75	%
   M/B		3.00
   P/E		19.90
   EV/EBITDA		8.08

   ^aCalculation is based on a 365-day year.
2. Construct the DuPont equation for both Barry and the industry. Do not round intermediate calculations. Round your answers to two decimal places.

   	FIRM	INDUSTRY
   Profit margin	%	1.49%
   Total assets turnover		1.75
   Equity multiplier