Question: 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

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 $ 138,600 Accounts payable $ 151,200
Receivables 315,000 Other current liabilities 189,000
Inventories 302,400 Notes payable to bank 63,000
Total current assets $ 756,000 Total current liabilities $ 403,200
Long-term debt 327,600
Net fixed assets 504,000 Common equity (52,920 shares) 529,200
Total assets $ 1,260,000 Total liabilities and equity $ 1,260,000

Barry Computer Company: Income Statement for Year Ended December 31, 2019 (In Thousands)
Sales $ 2,100,000
Cost of goods sold
Materials $1,050,000
Labor 504,000
Heat, light, and power 63,000
Indirect labor 105,000
Depreciation 105,000 1,827,000
Gross profit $ 273,000
Selling expenses 126,000
General and administrative expenses 63,000
Earnings before interest and taxes (EBIT) $ 84,000
Interest expense 29,484
Earnings before taxes (EBT) $ 54,516
Federal and state income taxes (25%) 13,629
Net income $ 40,887
Earnings per share $ 0.7726
Price per share on December 31, 2019 $ 12.00

  1. Calculate the indicated ratios for Barry. Do not round intermediate calculations. Round your answers to two decimal places.
    Ratio Barry Industry Average
    Current 1.89
    Quick 1.10
    Days sales outstandinga days 26 days
    Inventory turnover 7.28
    Total assets turnover 1.88
    Profit margin % 1.82 %
    ROA % 3.42 %
    ROE % 8.22 %
    ROIC % 7.50 %
    TIE 2.82
    Debt/Total capital % 41.87 %
    M/B 5.20
    P/E 18.25
    EV/EBITDA 7.29
    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 % 1.82%
    Total assets turnover 1.88
    Equity multiplier

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