Use the information from the mini$-$case "Ratios and Financial Planning at East Coast Yachts" below to answer the following questions $($please ignore the questions at the end of the mini$-$case$).$

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

Compare the financial ratios of East Coast Yachts to the industry as a whole by the following categories.

a$)$ Short$-$term solvency or liquidity measures

b$)$ Long$-$term solvency measures

c$)$ Asset management or turnover measures

d$)$ Profitability measures

Also comment on the performance of each category $($a$)$ to $($d$)$ above and overall performance of East Coast Yachts based on your analyses. You do not have to discuss every financial ratio in each category. Discuss the ratios that you think are most relevant and useful for the company.

Below is a list of possible reasons it may be good or bad that each ratio is higher or lower than the industry. Note that the list is not exhaustive, but merely one possible explanation for each ratio.

Ratio

Good

Current ratio

Quick ratio

Total asset turnover Better at utilizing assets.

Inventory turnover Better at inventory management,

Receivables turnover Better at collecting receivables.

Total debt$-$to$-$totalassets ratio

Better at managing current accounts.

Better at managing current accounts.

Better at utilizing assets.

Better at inventory management,

Less debt than industry median means the company is less likely to experience credit problems.

Bad

May be having liquidity problems.

May be having liquidity problems.

Assets may be older and depreciated, requiring extensive investment soon.

Could be experiencing inventory shortage.

May have credit terms that are too strict. Decreasing receivables turnover may increase sales.

Increasing the amount of debt can increase shareholder returns. Especially notice that it could increase ROE.