Compare the financial ratios of East Coast Yachts to the industry as a whole by the following categories.
a. Short-term solvency or liquidity measures
b. Long-term solvency measures
c. Asset management or turnover measures
d. Profitability measures
Also comment on the performance of each category (a) to (d) above and overall performance of East Coast Yachts based on your analyses.
EAST COAST YACHTS 2019 Income Statement Sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest Taxable income Taxes (40%) Net income Dividends $7,537,320 Addition to RE 5,024,880 $167,310,000 117,910,000 19,994,000 5,460,000 $23,946,000 3,009,000 $20,937,000 8,374,800 $12,562,200 EAST COAST YACHTS Balance Sheet as of December 31, 2019 Assets Liabilities & Equity Current assets Cash Accounts receivable Inventory Total Current liabilities Accounts payable Notes payable $6,461,000 13,078,000 $3,042,000 5,473,000 6,136,000 $14,651,000 Total $19,539,000 Long-term debt $33.735,000 Fixed assets Net plant and equipment $93,964,000 Shareholders' equity Common stock $5,200,000 Retained earnings 50,141,000 Total equity $55,341,000 Total liabilities $108,615,000 and equity Total assets $108,615,000 Yacht Industry Ratios Lower Quartile Median Upper Quartile Current ratio Quick ratio Total asset turnover Inventory turnover Receivables turnover Total debt to total assets ratio Total debt to equity ratio Equity multiplier Interest coverage Profit margin Return on assets Return on equity 0.50 0.21 0.68 4.89 6.27 0.44 0.79 1.79 5.18 4.05% 6.05% 9.93% 1.43 0.38 0.85 6.15 9.82 0.52 1.08 2.08 8.06 6.98% 10.53% 16.54% 1.89 0.62 1.38 10.89 14.11 0.61 1.56 2.56 9.83 9.87% 13.21% 26.15% EAST COAST YACHTS 2019 Income Statement Sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest Taxable income Taxes (40%) Net income Dividends $7,537,320 Addition to RE 5,024,880 $167,310,000 117,910,000 19,994,000 5,460,000 $23,946,000 3,009,000 $20,937,000 8,374,800 $12,562,200 EAST COAST YACHTS Balance Sheet as of December 31, 2019 Assets Liabilities & Equity Current assets Cash Accounts receivable Inventory Total Current liabilities Accounts payable Notes payable $6,461,000 13,078,000 $3,042,000 5,473,000 6,136,000 $14,651,000 Total $19,539,000 Long-term debt $33.735,000 Fixed assets Net plant and equipment $93,964,000 Shareholders' equity Common stock $5,200,000 Retained earnings 50,141,000 Total equity $55,341,000 Total liabilities $108,615,000 and equity Total assets $108,615,000 Yacht Industry Ratios Lower Quartile Median Upper Quartile Current ratio Quick ratio Total asset turnover Inventory turnover Receivables turnover Total debt to total assets ratio Total debt to equity ratio Equity multiplier Interest coverage Profit margin Return on assets Return on equity 0.50 0.21 0.68 4.89 6.27 0.44 0.79 1.79 5.18 4.05% 6.05% 9.93% 1.43 0.38 0.85 6.15 9.82 0.52 1.08 2.08 8.06 6.98% 10.53% 16.54% 1.89 0.62 1.38 10.89 14.11 0.61 1.56 2.56 9.83 9.87% 13.21% 26.15%
