Problem 4-23
Ratio Analysis
Data for Barry Computer Co and its industry averages follow
Barry Computer Company: |
Balance Sheet as of December 31, 2014 (In Thousands) |
Cash |
$142,290 |
Accounts payable |
$158,100 |
Receivables |
632,400 |
Other current liabilities |
142,290 |
Inventories |
379,440 |
Notes payable |
79,050 |
Total current assets |
$1,154,130 |
Total current liabilities |
$379,440 |
Long-term debt |
$316,200 |
Net fixed assets |
426,870 |
Common equity |
885,360 |
Total assets |
$1,581,000 |
Total liabilities and equity |
$1,581,000 |
Barry Computer Company:
Income Statement for Year Ended December 31, 2014 (In Thousands) |
Sales |
$2,550,000 |
Cost of goods sold |
Materials |
$1,045,500 |
Labor |
739,500 |
Heat, light, and power |
127,500 |
Indirect labor |
229,500 |
Depreciation |
127,500 |
$2,269,500 |
Gross profit |
$280,500 |
Selling expenses |
127,500 |
General and administrative expenses |
76,500 |
Earnings before interest and taxes (EBIT) |
$76,500 |
Interest expense |
37,944 |
Earnings before taxes (EBT) |
38,556 |
Federal and state income taxes (40%) |
15,422 |
Net income |
$23,134 |
- Calculate the indicated ratios for Barry Round your answers to two decimal places
Ratio |
Barry |
Industry Average |
Current |
______x |
301x |
Quick |
_______x |
202x |
Days sales outstandinga |
_______days |
4230days |
Inventory turnover |
_______x |
705x |
Total assets turnover |
_______x |
182x |
Profit margin |
______% |
085% |
ROA |
______% |
154% |
ROE |
______ % |
290% |
ROIC |
_____ % |
740% |
TIE |
_____x |
310x |
Debt/Total capital |
______ % |
4850% |
aCalculation is based on a 365-day year
- Construct the Du Pont equation for both Barry and the industry Round your answers to two decimal places
FIRM |
INDUSTRY |
Profit margin |
____% |
085% |
Total assets turnover |
_____ x |
182x |
Equity multiplier |
Solution:
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