Analysis and Comparison to Industry Averages

Current Ratio $(1\mathrm{.}98$ vs$.2\mathrm{.}0)$:

Slightly below average. This indicates that Barry Computers has almost enough current assets to cover its current liabilities but is just below the industry benchmark.

Quick Ratio $(1\mathrm{.}25$ vs$.1\mathrm{.}3)$:

Below average. Barry Computers has fewer liquid assets compared to the industry average, which might indicate potential liquidity issues if inventories are not easily converted to cash.

Days Sales Outstanding $($DSO$)(76\mathrm{.}3$ vs$.35$ days$)$:

Significantly above average. Barry Computers is taking much longer to collect its receivables than the industry average, which could affect its cash flow.

Inventory Turnover $(6\mathrm{.}66$ vs$.6\mathrm{.}7)$:

Slightly below average. The company is turning over its inventory at almost the same rate as the industry average, indicating efficient inventory management.

Total Assets Turnover $(1\mathrm{.}70$ vs$.3\mathrm{.}0)$:

Below average. Barry Computers is less efficient in using its assets to generate sales compared to the industry average.

Profit Margin $(2\mathrm{.}3\%$ vs$.1\mathrm{.}2\%)$:

Above average. The company is more profitable per dollar of sales compared to the industry average.

Return on Assets $($ROA$)(3\mathrm{.}9\%$ vs$.3\mathrm{.}6\%)$:

Above average. Barry Computers is generating a higher return on its assets compared to the industry average.

Return on Equity $($ROE$)(10\mathrm{.}2\%$ vs$.9\mathrm{.}0\%)$:

Above average. Indicates better performance in generating profit from shareholders' equity.

Return on Invested Capital $($ROIC$)(7\mathrm{.}48\%$ vs$.7\mathrm{.}5\%)$:

Slightly below average. The company's return on invested capital is almost in line with the industry average.

Times Interest Earned $($TIE$)(3\mathrm{.}33$ vs$.3\mathrm{.}0)$:

Above average. Barry Computers has a better ability to meet its interest obligations than the industry average.

Debt to Total Capital $(48\mathrm{.}5\%$ vs$.47\mathrm{.}0\%)$:

Above average. The company has a higher proportion of debt in its capital structure compared to the industry average.

Market$-$to$-$Book Ratio $($M$/$B$)($#DIV$/0!$ vs$.4\mathrm{.}0)$:

Undefined. This cannot be computed as the book value per share is zero.

Price$-$to$-$Earnings Ratio $($P$/$E$)(11\mathrm{.}79$ vs$.17\mathrm{.}86)$:

Below average. The company$$s stock is valued lower compared to the industry average relative to its earnings.

Enterprise Value to EBITDA $($EV$/$EBITDA$)(6\mathrm{.}64$ vs$.9\mathrm{.}0)$:

Below average. Indicates a lower market valuation relative to EBITDA compared to the industry average.

For each ratio that negatively falls outside the industry standards, develop at least one appropriate recommendation for the Barry Computer Company to improve financial performance over time $($over the next $35$ years to meet industry standards$).$

Assess limitations of the exclusive use of ratio analysis for evaluating financial performance. In your assessment, describe any qualitative factors that could also complement the ratio analysis and play an important role in improving financial performance.