Listed here, are the 2015 and 2016 balance sheets and income statements , for Otago Bay Marine Motors, a major manufacturer of top-of-the-line outboard motors.

	Otago Bay Marine Motors
	2016	2015	Industry Averages (for 2010)
Current ratio			2.34
Total asset turnover			1.29
Debt-equity ratio			10.18%
Net profit margin			9.18%
ROA			15.95%
ROE			19.75%
EPS			$1.31
P/E ratio			20.15
Dividend yield			0.45%
Payout ratio			25.93%
Price-to-book-value ratio			7.26

a. On the basis of the information provided, calculate the following financial ratios for 2015 and 2016:

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.

Otago Bay Marine Motors Balance Sheets ($ in thousands)

As of December 31,

2016

2015

Assets

Current assets

Cash and cash equivalents

$55,538

$87,603

Accounts receivable, net of allowances

20,515

10,212

Inventories

29,328

23,019

Prepaid expenses

3,258

5,528

Total current assets

$108,639

$126,362

Property, plant, and equipment, at cost

$136,900

$86,399

Less: Accumulated depreciation and amortization

(51,573)

(44,529)

Net fixed assets

$85,327

$41,870

Other assets

$105,652

$52,623

Total assets

$299,618

$220,855

Liabilities and Shareholders' Equity

Current liabilities

Notes and accounts payable

$28,335

$4,433

Dividends payable

930

893

Accrued liabilities

20,604

15,331

Total current liabilities

$49,869

$20,657

Noncurrent liabilities

Long-term debt

$41,164

$20,373

Shareholders' equity

Common stock

$5,207

$6,903

Capital in excess of par value

110,723

86,402

Retained earnings

92,655

86,520

Total shareholders' equity

$208,585

$179,825

Total liabilities and equity

$299,618

$220,855

Average number of common shares outstanding

11,852,000

11,852,000

Otago Bay Marine Motors Income Statements ($ in thousands)
	For the Year
	Ended December 31,
	2016		2015
Sales revenue	$259,858		$245,016
Cost of goods sold	132,295		128,041
Gross profit margin	$127,563		$116,975
Operating expenses	70,407		70,426
Earnings from operations	$57,156		$46,549
Other income (expense), net	3,957		4,555
Earnings before income taxes	$61,113		$51,104
Provision for income taxes	23,223		$19,420
Net earnings	$37,890		$31,684
Cash dividends ($0.34 and $0.28 per share)	$4,030		$3,319
Average price per share of common stock
(in the fourth quarter of the year)	$73.57		$82.31