To get Dan started with his analyses, Larissa has provided the financial statements. Dan has gathered the industry ratios for the yacht manufacturing industry:

Calculate all of the ratios listed in the industry table for East Coast Yachts.

Pigt $34$

Compare the performance of East Coast Yachts to the industry as a whole. For each ratio, comment on why it might be viewed as positive or negative relative to the industry. Suppose you create an inventory ratio caleulated as inventory divided by current liabilities. How do you interpret this ratio? How does East Coust Yachts compare to the industry average?

Calculate the sustainable growth rate of East Coast Yachis. Calculate EFN aud prepare pro forma income statements and balance sheets assuming grouth at precisely this rate. Recalculate the ratios in the previous question. What do you observe?

East Coast Yachts is unlikely to be willing to raise external equity capital, in part because the owners don't want to dilute their existing ownership and control positions. However, East Coast Yachits is planning for a growth rate of $20$ percent next year. What are your conclusions and recommendations about the feasibility of Enst Coast's expansion plans?

Most assets can be increased as a percentage of sales. For example, cash can be increased by any amoumt. However, fived assets often must be increased in specific amounts because it is impossible to buy part of a new plant or machine. In this case, a company has a "staircase" or "lumpy" fixed cost strueture. Assume that Eust Coust Yachits is currently producing at $100$ percent of capacity. As a result, to expand production, the company must set up an entirely new line at a cost of $$25$ million. Calculate the new EFN with this assumption. What does this imply about capacily utilization for East Coast Yachts next yean?