Help me please

Det equity ratio Tayle Mason was recently hired by Axe Capital Yachts to assist the company with its sheet term financial planning and also to evaluate the company's financial performance. Taylor graduated from college five years ago with a finance degree, and he has been employed in the treasury department of a Fortune 500 company since then. Axe Capital Yachts was founded 10 years ago by Bobby Axelrod. The company's operations are located in New York, and the company is structured as an LLC. The company has manufactured custom midsize, high-performance yachts for clients over this period, and its products have received high reviews for safety and reliability. The company's yachts have also recently received the highest award for customer satisfaction. The yachts are primarily purchased by wealthy individuals for pleasure use. Occasionally, a yacht is manufactured for purchase by a company for business parposes. The custom yacht industry is fragmented, with a number of manufacturers. As with any industry. there are market leaders, but the diverse nature of the industry ensures that no manufacturer dominates the market. The competition in the market, as well as the product cost, ensures that attention to detail is a necessity. For instance, Axe Capital Yachts will spend 80 to 100 hours on hand-buffing the stainless steel stem-iron, which is the metal cap on the yacht's bow that conceivably could collide with a dock or another boat. To get Taylor started with his analyses, Bobby has provided the following financial statements. Taylor has gathered the industry ratios for the yacht manufacturing industry. 2019 Income Statement Sales $ 167,310.000 Cost of goods sold 117.910.000 Other expenses 19,504.000 Depreciation 5.460.000 EBIT $ 23,946.000 Interest 3.009.000 Taxable income $ 20,907.000 Taxes (40%) 8.374 800 Net income $12.582 200 Dividende 7,537 320 Addition to retained earings 5,024 880 13 2019 Balance Sheet Assets Labs & Owners Equity Current Assets Current abilities Cash $ 3,042,000 AP $ 6,481 000 AR 5,473.000 NP 13.078.000 Inventory 6,136.000 Total $19.539,000 Total $ 14,651,000 LTD $ 33,735,000 Owners' equity CIS $ 5,200,000 RE 50,141,000 NFA $93.54.000 Total $ 5541 000 Total abilities and Total assets $10.615.000 owners' equity $10.615.000 Yachts Industry Ratios Lower Quartile Median Upper Quartile Current ratio 0.50 Quick ratio 0.38 Total asset turnover 0.68 0.85 Inventory turnover 4.89 6.15 10.89 Receivables turnover 6.27 9.82 14.11 Debt ratio 0.44 0.52 0.61 29 1.56 Equity multiplier 2.08 2.56 Interest coverage 5.15 8.06 9.83 Profit margin 4,0546 6.989 9.87 Return on assets 6.05% 10.50 13.21% Return on equity 9.93% 16,54% 26.15% Required: 1. Calculate all of the ratios listed in the industry table for Axe Capital Yachts. 2. Compare the performance of Axe Capital Yachts to the industry as a whole. For cach ratio, comment on why it might be viewed as positive or negative relative to the industry. Suppose you create an Herry GISKE as inventory divided by 1,3 1.89 Interest Tancome Net Income Dividende Addition to and carings 3009 5 20.37.000 834500 $12.50 200 7.537320 500410 $ 2019 Balance Sheet Assets Lies & Owners' Equity Current Assets Currenties Cash $ 3,042.000 AP $ 6,461.000 AR 5,473.000 NP 13.07 Inventory 6,135,000 Tour $19.539.000 Tot LTD 533.735.000 Owners 5 5.200,000 5014100 NFA $93.964.000 $ 5541 Tolband Total owney 108.615 CS Yachts Industry Ratio Lower Quartile Median Upper Quartile Current ratio 140 Quick ratio 0.21 Totale turnover Inventory turnover Receivables turnover Debt ratio 0.44 Debt-equity ratio 0.79 100 Equity multiplier 2.56 Interest coverage 5.18 Profit margin 4.056.90 Return on assets Return on equity Required: 1. Calculate all of the ratios listed in the industry table for Awe Capital Yachts 2. Compare the performance of Auce Capital Yachts to the industry as a whole. For each ratio, comment on why it might be viewed as positive or negative relative to the industry. Suppose you create an inventory ratio calculated as inventory divided by current liabilities. How do you interpret this ratio? How does Awe Capital Yachts compare to the industry average? 3. Calculate the sustainable growth rate of Axe Capital Yachts Calculate external funds needed (EFN) and prepare pro forma income statements and balance sheets assuming growth at precisely this rate. Recalculate the ratios in the previous question. What do you observe? 4. As a practical matter, Axe Capital Yachts is unlikely to be willing to raise external equity capital, in part because the owners don't want to dilute their existing ownership and control positions. However, Axe Capital Yachts is planning for a growth rate of 20 percent next year. What are your conclusions and recommendations about the feasibility of Axe Capital's expansion plans? 5. Most assets can be increased as a percentage of sales. For instance, cash can be increased by any amount. However, fixed assets often must be increased in specific amounts because it is impossible, as a practical matter, to buy part of a new plant or machine. In this case a company has a staircase or Tumpyfwed cost structure. Assume that Axe Capital Yachts is currently producing at 100 percent of capacity. As a result, to expand production, the company must set up an entirely new line at a cost of $30 milion Calculate the new EFN with this assumption. What does this imply about capacity utilization for Axe Capital Yachts next year? Det equity ratio Tayle Mason was recently hired by Axe Capital Yachts to assist the company with its sheet term financial planning and also to evaluate the company's financial performance. Taylor graduated from college five years ago with a finance degree, and he has been employed in the treasury department of a Fortune 500 company since then. Axe Capital Yachts was founded 10 years ago by Bobby Axelrod. The company's operations are located in New York, and the company is structured as an LLC. The company has manufactured custom midsize, high-performance yachts for clients over this period, and its products have received high reviews for safety and reliability. The company's yachts have also recently received the highest award for customer satisfaction. The yachts are primarily purchased by wealthy individuals for pleasure use. Occasionally, a yacht is manufactured for purchase by a company for business parposes. The custom yacht industry is fragmented, with a number of manufacturers. As with any industry. there are market leaders, but the diverse nature of the industry ensures that no manufacturer dominates the market. The competition in the market, as well as the product cost, ensures that attention to detail is a necessity. For instance, Axe Capital Yachts will spend 80 to 100 hours on hand-buffing the stainless steel stem-iron, which is the metal cap on the yacht's bow that conceivably could collide with a dock or another boat. To get Taylor started with his analyses, Bobby has provided the following financial statements. Taylor has gathered the industry ratios for the yacht manufacturing industry. 2019 Income Statement Sales $ 167,310.000 Cost of goods sold 117.910.000 Other expenses 19,504.000 Depreciation 5.460.000 EBIT $ 23,946.000 Interest 3.009.000 Taxable income $ 20,907.000 Taxes (40%) 8.374 800 Net income $12.582 200 Dividende 7,537 320 Addition to retained earings 5,024 880 13 2019 Balance Sheet Assets Labs & Owners Equity Current Assets Current abilities Cash $ 3,042,000 AP $ 6,481 000 AR 5,473.000 NP 13.078.000 Inventory 6,136.000 Total $19.539,000 Total $ 14,651,000 LTD $ 33,735,000 Owners' equity CIS $ 5,200,000 RE 50,141,000 NFA $93.54.000 Total $ 5541 000 Total abilities and Total assets $10.615.000 owners' equity $10.615.000 Yachts Industry Ratios Lower Quartile Median Upper Quartile Current ratio 0.50 Quick ratio 0.38 Total asset turnover 0.68 0.85 Inventory turnover 4.89 6.15 10.89 Receivables turnover 6.27 9.82 14.11 Debt ratio 0.44 0.52 0.61 29 1.56 Equity multiplier 2.08 2.56 Interest coverage 5.15 8.06 9.83 Profit margin 4,0546 6.989 9.87 Return on assets 6.05% 10.50 13.21% Return on equity 9.93% 16,54% 26.15% Required: 1. Calculate all of the ratios listed in the industry table for Axe Capital Yachts. 2. Compare the performance of Axe Capital Yachts to the industry as a whole. For cach ratio, comment on why it might be viewed as positive or negative relative to the industry. Suppose you create an Herry GISKE as inventory divided by 1,3 1.89 Interest Tancome Net Income Dividende Addition to and carings 3009 5 20.37.000 834500 $12.50 200 7.537320 500410 $ 2019 Balance Sheet Assets Lies & Owners' Equity Current Assets Currenties Cash $ 3,042.000 AP $ 6,461.000 AR 5,473.000 NP 13.07 Inventory 6,135,000 Tour $19.539.000 Tot LTD 533.735.000 Owners 5 5.200,000 5014100 NFA $93.964.000 $ 5541 Tolband Total owney 108.615 CS Yachts Industry Ratio Lower Quartile Median Upper Quartile Current ratio 140 Quick ratio 0.21 Totale turnover Inventory turnover Receivables turnover Debt ratio 0.44 Debt-equity ratio 0.79 100 Equity multiplier 2.56 Interest coverage 5.18 Profit margin 4.056.90 Return on assets Return on equity Required: 1. Calculate all of the ratios listed in the industry table for Awe Capital Yachts 2. Compare the performance of Auce Capital Yachts to the industry as a whole. For each ratio, comment on why it might be viewed as positive or negative relative to the industry. Suppose you create an inventory ratio calculated as inventory divided by current liabilities. How do you interpret this ratio? How does Awe Capital Yachts compare to the industry average? 3. Calculate the sustainable growth rate of Axe Capital Yachts Calculate external funds needed (EFN) and prepare pro forma income statements and balance sheets assuming growth at precisely this rate. Recalculate the ratios in the previous question. What do you observe? 4. As a practical matter, Axe Capital Yachts is unlikely to be willing to raise external equity capital, in part because the owners don't want to dilute their existing ownership and control positions. However, Axe Capital Yachts is planning for a growth rate of 20 percent next year. What are your conclusions and recommendations about the feasibility of Axe Capital's expansion plans? 5. Most assets can be increased as a percentage of sales. For instance, cash can be increased by any amount. However, fixed assets often must be increased in specific amounts because it is impossible, as a practical matter, to buy part of a new plant or machine. In this case a company has a staircase or Tumpyfwed cost structure. Assume that Axe Capital Yachts is currently producing at 100 percent of capacity. As a result, to expand production, the company must set up an entirely new line at a cost of $30 milion Calculate the new EFN with this assumption. What does this imply about capacity utilization for Axe Capital Yachts next year