1 Lake of Egypt Marina Inc, Balance Sheet as of December 31 2008. (In millions of dollars) Current Assets $ $ $ Cash and Marketable Securities 75 Accounts Receivable 115 Inventory 200 Fixed Assets 390 Plant & Equipment 580 Less Depreciation 110 470 Other long term assets 50 520 Current Liabilities 910 Accrued wages & taxes 40 Accounts payable 90 Notes payable 80 210 Long-term debt Stockholders equity 300 Preferred stock (5 million shares) 5 Common stock & paid in surplus 65 Retained earnings 330 400 910 Lake of Egypt Marina Inc, Income Statement for Year ending December 31 2008. (In millions of dollars) $ Net Sales (all credit) 515 Less Cost of Goods Sold 260 Gross Income 255 Less depreciation 22 Earnings Before Interest and Tax 233 Less interest 33 Earnings before tax 230 Less Taxes 57 Net Income 143 Less preference stock dividends 5 Income available to common stock holders 138 Less common stock dividends 65 Addition to retained earnings 73 The market price for Lake of Egypt Marina Inc common shares was $14.75 in 2008. Required: a. Calculate the following ratios for 2008: I. Current ratio ii. Quick ratio iii average collection period iv Average payment period v. Profit margin vi Total Debt to equity vii Earnings per share viii Price Earnings ratio (12 marks) b. The industry standards for the above ratio are given as follows: i. Current ratio 2 times ii. Quick ratio 1.2 times iii. Average collection period 32.5 days iv. Average payment period 45 days v. Profit margin 28.75% vi. Total Debt to equity 1.67 times or 167% (can be in % as well) vii. Earnings per share $2.00 viii. Price earnings ratio $15.60 Using the industry standards ratio and the ratios calculated in part a, evaluate the performance of Lake of Egypt Marina Inc. (13 marks) (Total 25 marks)