R A T I O S A N D F I N A N C I A L P L A N N I N G A T E A S T C O A S T Y A C H T S After Dans analysis of East Coast Yachts cash flow (at the end of our previous chapter), Larissa approached Dan about the companys performance and future growth plans. First, Larissa wants to find out how East Coast Yachts is performing relative to its peers. Additionally, she wants to find out the future financing necessary to fund the companys growth. In the past, East Coast Yachts experienced difficulty in financing its growth plan, in large part because of poor planning. In fact, the company had to turn down several large jobs because its facilities were unable to handle the additional demand. Larissa hoped that Dan would be able to estimate the amount of capital the company would have to raise next year so that East Coast Yachts would be better pre- pared to fund its expansion plans. To get Dan started with his analyses, Larissa provided the following financial statements. Dan then gathered the industry ratios for the yacht manufacturing industry.

(Calculate the ratios listed in the table) and compare the performance of the company to the MEDIAN industry Ratios. Calculate all of the ratios listed in the industry table for East Coast Yachts.

East Coast Yachts

2014 Income Statement

Sales $555,984,000

Cost of goods sold $391,824,000

Selling, general, and administrative $66,441,600

Depreciation 18,144,000

EBIT $79,574,400

Interest expense $10,000,800

EBT $69,573,600

Taxes 27,829,440

Net income $41,744,160

Dividends $15,795,000

Retained earnings $25,949,160

East Coast Yachts

2014 Balance Sheet

Current assets Current liabities

Cash and equivalents $10,108,800 Account payable $23,814,400

Accounts receivable 16,983,200 Notes payable 16,852,500

Inventory 18,317,860 Accured expenses 5,566,500

Other 1,065,600 Total cuurent liabilities $46,233,400

Total current assets $46,475,460

Fixed assets Long-term debt $131,904,000

Property, plant, and equipment $415,827,000 Total long-term liabilities $131,904,000

Less accumulated depreciation $(103,496,300)

Net property, plant, and equipment $312,330,700

Intangible assets and others 6,156,000 Stockholders' equity

Total fixed assets $318,486,700 Preferred stock $2,700,000

Common stock 34,167,000

Capital surplus 25,633,000

Accumulated retained earning 167,524,760

Less treasury stock (43,200,000)

Total equity $186,824,760

Total assets $386,962,160 Total liabilities and shareholders' equity $364,962,160

Yacht Industry Ratios

Lower Quartile Median Upper Quartile

Current ratio .86 1.51 1.97

Quick ratio .43 .75 1.01

Total asset turnover 1.10 1.27 1.46

Inventory turnover 12.18 14.38 16.43

Receivables turnover 10.25 17.65 22.43

Debt ratio .32 .49 .61

Debt-equity ratio .51 .83 1.03

Equity multiplier 1.51 1.83 2.03

Interest coverage 5.72 8.21 10.83

Profit margin 5.02% 7.48% 9.05%

Return on assets 7.05% 10.67% 14.16%

Return on equity 9.06% 14.32% 22.41%

Please show how you get answer step by step.

Thank you,