Question 2 3 pts The financial statements for Lake of Egypt Marina is provided: Lake of Egypt Marina, Inc. Balance Sheet as of December 31, 2007 and 2008 (in millions of dollars) 2007 2008 Liabilities & Equity Assets 2007 2008 Current assets: Cash and marketable securities Accounts receivable Inventory Total Current liabilities Accrued wages and $ 65 $ 75 taxes 110 115 Accounts payable 190 200 Notes payable S 365 $ 390 Total $ 43 $ 40 80 90 20 80 $ 193 $ 210 Fixed assets: Gross plant and equipment Less: Depreciation Net plant and equipment Other long-term assets Total Long-term debt: $ 280 S 300 $ 471 S 580 Stockholders' equity: 100 110 Preferred stock (5 million shares) S SS 5 Common stock and $ 371 $ 470 paid-in surplus 65 65 50 (65 million shares) $ 420 S 520 Retained earnings 242 330 Total $ 312 $ 400 $ 785 S 910 Total liabilities and equity $ 785 $ 910 49 Total assets Lake of Egypt Marina, Inc. Income Statement for Years Ending December 31, 2007 and 2008 (in millions of dollars) 2007 2008 Net sales (all credit) $ 432 $ 515 Less: Cost of goods sold 200 260 Gross profits 232 255 Less: Depreciation 20 22 Earnings before interest and taxes (EBIT) 212 233 Less: Interest Earnings before taxes (EBT) 182 200 Less: Taxes 55 57 Net income $ 127 S 143 30 33 Lake of Egypt Marina, Inc. Income Statement for Years Ending December 31, 2007 and 2008 in millions of dollars) 2007 2008 Net sales (all credit) $ 432 $ 515 Less: Cost of goods sold 200 260 Gross profits 232 255 Less: Depreciation 20 22 Earnings before interest and taxes (EBIT) 212 233 Less: Interest 30 33 Earnings before taxes (EBT) 182 200 Less: Taxes 55 57 Net income $ 127 $ 143 Less: Preferred stock dividends $_5 S5 Net income available to common stockholders $ 138 Less: Common stock dividends $ 65 $ 65 Addition to retained earnings $ 57 $ 73 Per (common) share data: Earnings per share (EPS) $1.877 $2.123 Dividends per share (DPS) $1.000 $1.000 Book value per share (BV) $4.723 $6.077 Market value (price) per share (MV) $12.550 $14.750 $ 122 1. Current ratio 2. Quick ratio 3. Inventory turnover ratio 4. Days' sales in inventory 5. Average collection period 6. Average payment period 7. Total asset turnover ratio 8. Debt-to-equity ratio 9. Profit margin Industry 2.0 times 1.2 times 3.60 times 101.39 days 32.50 days 45 days 0.85 times 1.67 times 28.75% Per (common) share data: Earnings per share (EPS) Dividends per share (DPS) Book value per share (BV) Market value (price) per share (MV) $1.877 $1.000 $4.723 $12.550 $2.123 $1.000 $6.077 $14.750 1. Current ratio 2. Quick ratio 3. Inventory turnover ratio 4. Days' sales in inventory 5. Average collection period 6. Average payment period 7. Total asset turnover ratio 8. Debt-to-equity ratio 9. Profit margin Industry 2.0 times 1.2 times 3.60 times 101.39 days 32.50 days 45 days 0.85 times 1.67 times 28.75% Requirements: Using the Industry averages provided, calculate similar ratios for Lake of Egypt Marina Inc. and comment on its performance as at year-end 2008. The financial statements for Lake of Egypt Marina is provided: Assets Current assets: Cash and marketable securities Accounts receivable Inventory Total Lake of Egypt Marina, Inc. Balance Sheet as of December 31, 2007 and 2008 (in millions of dollars) 2007 2008 Liabilities & Equity 2007 2008 Current liabilities Accrued wages and $ 65 S 75 taxes $ 43 $ 40 110 115 Accounts payable 80 90 190 200 Notes payable 70 80 $365 $ 390 Total $ 193 $ 210 Long-term debt: $ 280 $ 300 $ 471 $ 580 Stockholders' equity: 100 110 Preferred stock (5 million shares) $ 5 $ 5 Common stock and $ 371 $ 470 paid-in surplus 65 65 50 (65 million shares) $ 420 $ 520 Retained earnings 242 Total $ 312 $ 400 S_785 S_910 Total liabilities and equity $ 785 S 910 Fixed assets: Gross plant and equipment Less: Depreciation Net plant and equipment Other long-term assets Total 49 330 Total assets Lake of Egypt Marina, Inc. Income Statement for Years Ending December 31, 2007 and 2008 (in millions of dollars) 2007 2008 Net sales (all credit) $ 432 $ 515 Less: Cost of goods sold 200 260 Gross profits 232 255 Less: Depreciation 20 22 Earnings before interest and taxes (EBIT) 212 233 Less: Interest 30 33 Earnings before taxes (EBT) 182 200 Less: Taxes 55 57 Net income $ 127 S 143 Lake of Egypt Marina, Inc. Income Statement for Years Ending December 31, 2007 and 2008 in millions of dollars) 2007 2008 Net sales (all credit) $ 432 $ 515 Less: Cost of goods sold 200 260 Gross profits 232 255 Less: Depreciation 20 22 Earnings before interest and taxes (EBIT) 212 233 Less: Interest 30 33 Earnings before taxes (EBT) 182 200 Less: Taxes 55 57 Net income $ 127 $ 143 Less: Preferred stock dividends $_5 S5 Net income available to common stockholders $ 138 Less: Common stock dividends $ 65 $ 65 Addition to retained earnings $ 57 $ 73 Per (common) share data: Earnings per share (EPS) $1.877 $2.123 Dividends per share (DPS) $1.000 $1.000 Book value per share (BV) $4.723 $6.077 Market value (price) per share (MV) $12.550 $14.750 $ 122 1. Current ratio 2. Quick ratio 3. Inventory turnover ratio 4. Days' sales in inventory 5. Average collection period 6. Average payment period 7. Total asset turnover ratio 8. Debt-to-equity ratio 9. Profit margin Industry 2.0 times 1.2 times 3.60 times 101.39 days 32.50 days 45 days 0.85 times 1.67 times 28.75% Per (common) share data: Earnings per share (EPS) Dividends per share (DPS) Book value per share (BV) Market value (price) per share (MV) $1.877 $1.000 $4.723 $12.550 $2.123 $1.000 $6.077 $14.750 1. Current ratio 2. Quick ratio 3. Inventory turnover ratio 4. Days' sales in inventory 5. Average collection period 6. Average payment period 7. Total asset turnover ratio 8. Debt-to-equity ratio 9. Profit margin Industry 2.0 times 1.2 times 3.60 times 101.39 days 32.50 days 45 days 0.85 times 1.67 times 28.75% Requirements: Using the Industry averages provided, calculate similar ratios for Lake of Egypt Marina Inc. and comment on its performance as at year-end 2008