please answer all parts of the question with explanation
RATIOS AND FINANCIAL PLANNING AT EAST COAST YACHTS Dan Ervin was recently hired by East Coast Yachts to assist the company with its short-term financial planning and also to evaluate the company's financial performance. Dan 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. East Coast Yachts was founded 10 years ago by Larissa Warren. The company's operations are located near Hilton Head Island, South Carolina, 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 purposes. 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, East Coast 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 Dan started with his analyses, Larissa has provided the following financial statements. Dan has gathered the industry ratios for the yacht manufacturing industry. EAST COAST YACHTS 2015 Income Statement Sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest Taxable income Taxes (40%) Net income $ 210,900,000 148,600,000 25.192.000 6.879.000 $ 30,229,000 3.791.000 $ 26,438,000 10.575.200 $ 15,862,800 Dividends Add to RE $ 4.759,301 $ 11,103,499 Assets Current Assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment EAST COAST YACHTS Balance Sheet as of December 31, 2015 Liabilities & Equity Current Liabilities $ 3,285,600 Accounts payable $ 6,977,700 5,910,800 Notes payable 14,342.600 6,627,300 $ 15,823,700 Total $ 21,320,300 Long-term debt $_36,400,000 $ 101.481,200 Shareholders' equity Common stock $ 5,580,000 Retained earnings 54,004,600 Total equity $ 59,584,600 $ 117,304.900 Total liabilities and equity $117304.900 Total assets Yacht Industry Ratios Lower Quartile Median Upper Quartile Current ratio Quick ratio Total asset turnover Inventory turnover Receivables turnover Debt ratio Debt-equity ratio Equity multiplier Interest coverage Profit margin Return on assets Return on equity 0.50 0.21 0.68 6.85 6.27 0.44 0.79 1.79 5.18 4.05% 6.05% 9.93% 143 0.38 0.85 9.15 11.81 0.52 1.08 2.08 8.06 6.98% 10.53% 16.54% 1 89 0.62 1.38 16.13 21.45 0.61 1.56 256 9.83 9.87% 15.83% 28.14% 4.a. Define what is the sustainable growth rate along with the formula and calculate that rate for East Coast Yachts. Calculate external funds needed (EFN) and prepare pro forma income statements and balance sheets assuming growth at precisely this rate. (10 Points) Ah Pecalculate the paties in the industry table for cu coacvarbie bard RATIOS AND FINANCIAL PLANNING AT EAST COAST YACHTS Dan Ervin was recently hired by East Coast Yachts to assist the company with its short-term financial planning and also to evaluate the company's financial performance. Dan 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. East Coast Yachts was founded 10 years ago by Larissa Warren. The company's operations are located near Hilton Head Island, South Carolina, 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 purposes. 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, East Coast 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 Dan started with his analyses, Larissa has provided the following financial statements. Dan has gathered the industry ratios for the yacht manufacturing industry. EAST COAST YACHTS 2015 Income Statement Sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest Taxable income Taxes (40%) Net income $ 210,900,000 148,600,000 25.192.000 6.879.000 $ 30,229,000 3.791.000 $ 26,438,000 10.575.200 $ 15,862,800 Dividends Add to RE $ 4.759,301 $ 11,103,499 Assets Current Assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment EAST COAST YACHTS Balance Sheet as of December 31, 2015 Liabilities & Equity Current Liabilities $ 3,285,600 Accounts payable $ 6,977,700 5,910,800 Notes payable 14,342.600 6,627,300 $ 15,823,700 Total $ 21,320,300 Long-term debt $_36,400,000 $ 101.481,200 Shareholders' equity Common stock $ 5,580,000 Retained earnings 54,004,600 Total equity $ 59,584,600 $ 117,304.900 Total liabilities and equity $117304.900 Total assets Yacht Industry Ratios Lower Quartile Median Upper Quartile Current ratio Quick ratio Total asset turnover Inventory turnover Receivables turnover Debt ratio Debt-equity ratio Equity multiplier Interest coverage Profit margin Return on assets Return on equity 0.50 0.21 0.68 6.85 6.27 0.44 0.79 1.79 5.18 4.05% 6.05% 9.93% 143 0.38 0.85 9.15 11.81 0.52 1.08 2.08 8.06 6.98% 10.53% 16.54% 1 89 0.62 1.38 16.13 21.45 0.61 1.56 256 9.83 9.87% 15.83% 28.14% 4.a. Define what is the sustainable growth rate along with the formula and calculate that rate for East Coast Yachts. Calculate external funds needed (EFN) and prepare pro forma income statements and balance sheets assuming growth at precisely this rate. (10 Points) Ah Pecalculate the paties in the industry table for cu coacvarbie bard
