# Ratio Analysis marketing homework help

Problem 4-23
Ratio Analysis

Data for Barry Computer Co. and its industry averages follow.

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Barry Computer Company:

Balance Sheet as of December 31, 2015 (In Thousands)

Cash

\$77,500

Accounts payable

\$129,000

Receivables

336,000

Other current liabilities

117,000

Inventories

241,500

Notes payable

84,000

Total current assets

\$655,000

Total current liabilities

\$330,000

Long-term debt

\$256,500

Net fixed assets

292,500

Common equity

361,000

Total assets

\$947,500

Total liabilities and equity

\$648,000

 Barry Computer Company: Income Statement for Year Ended December 31, 2015(In Thousands) Sales \$1,607,500 Cost of goods sold Materials \$717000 Labor 453,000 Heat, light, and power 68,000 Indirect labor 113,000 Depreciation 41,500 \$1,39,500
 Gross profit \$215,000 Selling expenses 115,000 General and administrative expenses 30,000 Earnings before interest and taxes (EBIT) \$70,000 Interest expense 24,500 Earnings before taxes (EBT) 45,500 Federal and state income taxes (40%) 18,200 Net income \$27,300

Calculate the indicated ratios for Barry. Round your answers to two decimal places.

 Ratio Barry Industry Average Current x 2.0x Quick x 1.3x Days sales outstandinga days 35days Inventory turnover x 6.7x Total assets turnover x 3.0x Profit margin % 1.2% ROA % 3.6% ROE % 9.0% ROIC % 7.5% TIE x 3.0x Debt/Total capital % 47.0%

Application:
Using Ratio Analysis To Inform Organizational Decisions

The Assignment: Barry Computer Company

Prepare a performance report on Barry Computer Company. (Problem 4-23 on pages 131-132 of the course text provides a balance sheet and an income statement for the company.)

• Prepare your performance report to show calculations for the eleven ratios listed on page 131-132, as well as a comparison of your computed ratios with the listed industry averages.
• Write a short memo to your supervisor explaining your findings and your recommendations for improvement.
• Suggest some ways in which the company can plan to improve below industry average ratio performance.
• Explain why your recommendations would be effective.
• Be sure to list your computations in an appendix to your report.

General Guidance on Application Length:

The memo portion of this assignment will typically be 2 pages in length as a general expectation/estimate. You can show your calculations of financial ratios in a supplemental appendix to your memo. Refer to the rubric for the Week 2 Assignment for grading elements and criteria for the assignment. Your Instructor will use the rubric to assess your work.

AUTHENIC WORK, PLEASE USE OWN WORK