Question $1$

Lake of Egypt Marina Inc, Balance Sheet as of December $312008.($In millions of dollars$)$

Current Assets $ $ $

Cash and Marketable Securities $75$

Accounts Receivable $115$

Inventory $200$

Fixed Assets $390$

Plant & Equipment $580$

Less Depreciation $110470$

Other long term assets $50520$

Current Liabilities $910$

Accrued wages & taxes $40$

Accounts payable $90$

Notes payable $80210$

Long$-$term debt

Stockholders$$ equity $300$

Preferred stock $(5$ million shares$)5$

Common stock & paid in surplus $65$

Retained earnings $330400$

$910$

Lake of Egypt Marina Inc,

Income Statement

for Year ending December $312008.$

$($In millions of dollars$)$

$

Net Sales $($all credit$)515$

Less Cost of Goods Sold $260$

Gross Income $255$

Less depreciation $22$

Earnings Before Interest and Tax $233$

Less interest $33$

Earnings before tax $230$

Less Taxes $57$

Net Income $143$

Less preference stock dividends $5$

Income available to common stock holders $138$

Less common stock dividends $65$

Addition to retained earnings $73$

The market price for Lake of Egypt Marina Inc common shares was $$14\mathrm{.}75$ in $2008.$

Required:

a$.$ Calculate the following ratios for $2008$:

I. Current ratio

ii$.$ Quick ratio

iii average collection period

iv Average payment period

v$.$ Profit margin

vi Total Debt to equity

vii Earnings per share

viii Price Earnings ratio $(12$ marks$)$