Question

Chapter 4 Analysis of Financial Statements 141 Barry Computer Company: Income Statement for Year Ended December 31, 2019 (in Thousands) Sales Cost of goods sold $1,607,500 Materials $717,000 Labor 453,000 Heat, light, and power 68,000 Indirect labor 113,000 Depreciation 41,500 1,392,500 Gross profit $ 215,000 Selling expenses 115,000 General and administrative expenses 30,000 Earnings before interest and taxes (EBIT) 70,000 Interest expense 21,000 Earnings before taxes (EBT) 49,000 Federal and state income taxes (25%) 12,250 Net income $ 36,750 Earnings per share Price per share on December 31, 2019 $ $ 1.018 12.00 Barry Ratio Current Quick Industry Average 2.0X 1.3x 35 days 6.7X Days sales outstanding 3.0X 1.6% Inventory turnover Total assets turnover Profit margin ROA ROE ROIC TIE Debt/Total capital M/B 4.8% 12.1% 9.4% 3.5X 47.0% 4.22X 13.27 9.14 P/E EV/EBITDA Calculation is based on a 365-day year. DUPONT ANALYSIS A firm has been experiencing low profitability in recent years. Perform an analysis of the firm's financial position using the DuPont equation. The firm has no lease payments but has a $2 million sinking fund payment on its debt. The most recent industry average ratios and the firm's financial statements are as follows:

Answer 1

As per rules I am answering the first 4 subparts of the question

Current ratio = Current assets/ current liabilities

= 655000/330000

=1.98

Quick ratio=(cash + securities+ accounts receivable)/ current liabilities

= (77500+336000)/330000

=1.25

Days sales outstanding = Receivables*365/Sales

= 336000*365/1607500

=76.29

Inventory turnover= Cost of goods sold/ Inventory

= 1392500/241500 = 5.77