Need help with finance question please Problem 4-23 Ratio Analysis Data for Barr
ID: 2729449 • Letter: N
Question
Need help with finance question please
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) $104,725 $209,450 Cash Accounts payable Receivables 795,910 Other current liabilities 335,120 Notes payable 439,845 Inventories 88,505 Total current assets $1,340,480 Total current $733,075 liabilities Long-term debt $607,405 Common equity Net fixed assets 754,020 754,020 Total liabilities and $2,094,500 Total assets $2,094,500 equityExplanation / Answer
Answer:- (a) Dollar amount in thousands : firm ind.Average Current ratio: = current assets / current liabilities $1,340,480 /$733,075 1.82X 1.85X Quick ratio: = current assets – inventories / current liabilities $1,340,480-439,845 / $733,075 1.23X 1.24X DSO : = Account Receivable / sales /365 $795,910 /2,950,000 / 365 98.47 days 46.89 days Inventory turnover := sales / inventories $2,950,000 / $439,845 6.70X 7.19X T.A turnover :-=Sales / total assets $2,950,000 / $2,094,500 1.40X 1.56X Profit margin : =net income / sales $9,367 / $ 2,950,000 .31% .30% ROA = net income / total assets $9,367 / 2,094,500 .44% .47% ROE: = net income / common equity $9,367 / $754,020 1.24% 1.38% Debt ratio : = total Debts / total assets 1,340,480 / 2,094,500 64% 48.50% (b) Profit margin firm= 0.31% industry = 030% Total assets turnover firm = 1.40 industry = 1.56 Equity multiplier firm = 2.81 Equity multiplier Industry=2.93 (Firm Equity Multiplier = Total Assets/Common Equity)