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 $ 146,250 Accounts payable $ 146,250
Receivables 365,625 Other current liabilities 160,875
Inventories 307,125 Notes payable to bank 160,875
Total current assets $ 819,000 Total current liabilities $ 468,000
Long-term debt 321,750
Net fixed assets 643,500 Common equity (67,275 shares) 672,750
Total assets $ 1,462,500 Total liabilities and equity $ 1,462,500

Barry Computer Company: Income Statement for Year Ended December 31, 2019 (In Thousands)
Sales $ 2,250,000
Cost of goods sold
Materials $900,000
Labor 630,000
Heat, light, and power 67,500
Indirect labor 202,500
Depreciation 67,500 1,867,500
Gross profit $ 382,500
Selling expenses 225,000
General and administrative expenses 45,000
Earnings before interest and taxes (EBIT) $ 112,500
Interest expense 35,393
Earnings before taxes (EBT) $ 77,107
Federal and state income taxes (25%) 19,277
Net income $ 57,830
Earnings per share $ 0.8596
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 1.76
    Quick 1.06
    Days sales outstandinga days 28 days
    Inventory turnover 7.54
    Total assets turnover 1.70
    Profit margin % 2.45 %
    ROA % 4.16 %
    ROE % 9.55 %
    ROIC % 7.80 %
    TIE 3.11
    Debt/Total capital % 42.67 %
    M/B 5.20
    P/E 16.36
    EV/EBITDA 8.77
    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 % 2.45%
    Total assets turnover 1.70
    Equity multiplier

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