isted here, are the 2015 and 2016 balance sheets Otago Bay Marine Motors Balance Sheets ($ in thousands) As of December 31, 2016 2015 Assets Current assets Cash and cash equivalents 55,403 88,106 Accounts receivable, net of allowances 19,988 13,985 Inventories 28,682 24,369 Prepaid expenses 6,709 4,446 Total current assets 110,782 130,906 Property, plant, and equipment, at cost 136,814 83,595 Less: Accumulated depreciation and amortization -48,905 -42,030 Net fixed assets 87,909 41,565 Other assets 102,919 49,619 Total assets 301,610 222,090 Liabilities and Shareholders' Equity Current liabilities Notes and accounts payable 26,892 4,448 Dividends payable 1,124 817 Accrued liabilities 21,416 17,524 Total current liabilities 49,432 22,789 Noncurrent liabilities Long-term debt 40,764 20,442 Shareholders' equity Common stock 7,923 5,485 Capital in excess of par value 110,880 85,242 Retained earnings 92,611 88,132 Total shareholders' equity 211,414 178,859 Total liabilities and equity 301,610 222,090 Average number of common shares outstanding 10,600,000 10,600,000 , LOADING...

, and income statements

Otago Bay Marine Motors Income Statements ($ in thousands) For the Year For the Year Ended December 31, Ended December 31, 2016 2015 Sales revenue 260,123 244,554 Cost of goods sold 133,217 128,388 Gross profit margin 126,906 116,166 Operating expenses 73,316 68,304 Earnings from operations 53,590 47,862 Other income (expense), net 2,215 4,913 Earnings before income taxes 55,805 52,775 Provision for income taxes 21,206 20,055 Net earnings 34,599 32,720 Cash dividends ($0.38 and $0.23 per share) 4,028 2,438 Average price per share of common stock (in the fourth quarter of the year) 68.81 79.27

, for Otago Bay Marine Motors, a major manufacturer of top-of-the-line outboard motors. a. On the basis of the information provided, calculate the following financial ratios for 2015 and 2016

Otago Bay Marine Motors 2016 2015 Industry Averages(for 2010) Current ratio 2.40 Total asset turnover 1.28 Debt-equity ratio 10.28% Net profit margin 9.55% ROA 16.33% ROE 19.87% EPS $1.73 P/E ratio 18.27 Dividend yield 0.40% Payout ratio 26.96% Price-to-book-value ratio 6.53

. b. Considering the financial ratios you computed, along with the industry averages, how would you characterize the financial condition of Otago Bay Marine Motors? Explain.