FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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: | ||||
Cash | $224,250 | Accounts payable | $207,000 | |
Receivables | 621,000 | Other current liabilities | 207,000 | |
Inventories | 448,500 | Notes payable to bank | 207,000 | |
Total current assets | $1,293,750 | Total current liabilities | $621,000 | |
Long-term debt | $345,000 | |||
Net fixed assets | 431,250 | Common equity (75,900 shares) | 759,000 | |
Total assets | $1,725,000 | Total liabilities and equity | $1,725,000 |
Barry Computer Company: Income Statement for Year Ended December 31, 2018 (In Thousands) |
|||
Sales | $2,300,000 | ||
Cost of goods sold | |||
Materials | $1,035,000 | ||
Labor | 552,000 | ||
Heat, light, and power | 161,000 | ||
Indirect labor | 207,000 | ||
|
46,000 | 2,001,000 |
Gross profit | $ | 299,000 |
Selling expenses | 115,000 | |
General and administrative expenses | $ | 69,000 |
Earnings before interest and taxes (EBIT) | $ | 115,000 |
Interest expense | 27,600 | |
Earnings before taxes (EBT) | $ | 87,400 |
Federal and state income taxes (40%) | 34,960 | |
Net income | $ | 52,440 |
Earnings per share | $ | 0.69091 |
Price per share on December 31, 2018 | $ | 14.00 |
- Calculate the indicated ratios for Barry. Round your answers to two decimal places.
Ratio Barry Industry Average Current x 2.05x Quick x 1.39x Days sales outstandinga days 46.93 days Inventory turnover x 5.49x Total assets turnover x 1.47x Profit margin % 2.17% ROA % 3.20% ROE % 7.35% ROIC % 7.10% TIE x 4.27x Debt/Total capital % 43.61% M/B % 4.40% P/E % 22.65% EV/EBITDA % 10.82%
aCalculation is based on a 365-day year. - Construct the DuPont equation for both Barry and the industry. Round your answers to two decimal places.
FIRM INDUSTRY Profit margin % 2.17% Total assets turnover x 1.47x Equity multiplier x x
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