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 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, 2018 (In Thousands) Cash $221,260 Accounts payable $255,300 Receivables 629,740 Other current liabilities 187,220 Inventories 476,560 Notes payable to bank 170,200 Total current assets $1,327,560 Total current liabilities $612,720 Long-term debt $391,460 Net fixed assets 374,440 Common equity (69,782 697,820 shares) Total assets $1,702,000 Total liabilities and equity $1,702,000

Answer 1

Solution a. Current Ratio = Current Assets/ Current Liabilities

  Current Assets = 1327,560

Current Laibilities = 612,720

Current ratio = 1327,560/ 612,720

= 2.17

Quick Ratio = Liquid Assets/ Current Liabilities

Liquid Assets = Current assets - Stock - Prepaid Expenses

= 1327,560-476,560

= 851,000

Quick Ratio = 851,000/ 612,720

= 1.39

Days Sales Outstanding = Debtors* 365 days/ credit sales

= 629,740* 365/ 2300,000

= 99.94 days

Inventory Turnover Ratio = Cost of Goods sold /Average stock

= 2001,000 / (629,740 + 0)/2

= 6.36 times

Total Assets Turnover = Total Sales/ Total Assets

= 2300,000 / 1702,000

= 1.35 times

Profit Margin = Net Income / sales

= 24,959 *100/ 2300,000

= 1.09%

ROA = net income/ total assets

= 24959 / 1702,000

= 1.47%

ROE = Net Income / shareholders Equity

= 24,959 / 697,820

= 3.58%

ROIC = Net Income - Dividend/ (Debt + Equity)

= 24,959 / (391460 +697820)

= 2.29%

Tie Ratio = Earning before Interest & Taxes / Interest Expenses

= 69000 /27,402

= 2.52 times

Debt/ Total Capital = debt / (Debt+ equity)

= 697,820 / (391460 +697820)

= 697,820 / 1089,280

= 0.64

M/ B ratio = market price per share / book value per share

  Market price per share = 14

Book value per share = Total Assets- Liabilities / number of shares

= 1702,000-391,460- 612,720/ 69,782

= 10

M/B Ratio = 14 / 10

= 1.4 times

P/E Ratio = Market price per share / earning per share

= 14 / 0.35767

= 39.14 times

EV/ EBITDA = Enterprise Value / Earning before tax + interest+ depreciation+ amortization

Enterprise value = market capitalization + debt - cash

= 976,948 + 391460-221260

= 1147,148

EV/ EBITDA = 1147,148 / (69000+115000)

= 6.23 times

b. Profit Margin = 1.09%

Assets turnover = 1.35

Equity Multiplier = Total Assets / Total Equity

= 1702,000 / 697820 = 2.44

C.i