East Coast Yachts key
1. Calculate all of the ratios listed in the industry table for East Coast Yachts Current ratio=CA/CL= 14,651,000/19,539,000=0.75
Quick Ratio=(CA-Inventory)/CL=(14651000-6136000)/19539000=0.44
Total assert turnover=Sales / Total Assets=167310000/108615000=1.54
Inventory turnover=Cost of Goods Sold / Inventory=117910000/6136000=19.22
Receivable turnover=Sales / Accounts Receivable=167310000/5473000=30.57
Debt ratio(TA-TE)/TA=(108615000-55341000)/108615000=0.49
Debt-equity ratio=TD/TE=33735000/55341000=0.61
Equity multiplier=TA/TE=108615000/55341000=1.96
Interest coverage=23496000/300900=7.96
Profit margin=Net Income / Sales=12562200/167310000=0.07
Return on asserts=Net Income / Total Assets=12562200/108615000=0.12
Return on equity=Net Income / Total Equity=12562200/55341000=0.23
2. 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 calculated as inventory divided by current liabilities. How do you interpret this ratio? How does East Coast Yachts compare to the industry average?
Current ratio is negative because CA smaller than CL
Quick Ratio is positive because the ratio is bigger than the industry upper quartile ratio.
Total assert turnover is positive the ratio because the ratio is bigger than the industry upper quartile ratio.
Inventory turnover is positive because it is higher than the industry average. It represents that the company has a high sales based on its inventory.
Receivable turnover is positive because it shows that the company can collect the sales faster.
Debt ratio is positive because it shows that the company has a lower debt risk than the industry average.
Debt-equity ratio is positive because it shows that the company is less aggressive using debt which means the company has relatively lower debt risk.
Equity multiplier is negative because it shows that the
Quick Ratio=(CA-Inventory)/CL=(14651000-6136000)/19539000=0.44
Total assert turnover=Sales / Total Assets=167310000/108615000=1.54
Inventory turnover=Cost of Goods Sold / Inventory=117910000/6136000=19.22
Receivable turnover=Sales / Accounts Receivable=167310000/5473000=30.57
Debt ratio(TA-TE)/TA=(108615000-55341000)/108615000=0.49
Debt-equity ratio=TD/TE=33735000/55341000=0.61
Equity multiplier=TA/TE=108615000/55341000=1.96
Interest coverage=23496000/300900=7.96
Profit margin=Net Income / Sales=12562200/167310000=0.07
Return on asserts=Net Income / Total Assets=12562200/108615000=0.12
Return on equity=Net Income / Total Equity=12562200/55341000=0.23
2. 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 calculated as inventory divided by current liabilities. How do you interpret this ratio? How does East Coast Yachts compare to the industry average?
Current ratio is negative because CA smaller than CL
Quick Ratio is positive because the ratio is bigger than the industry upper quartile ratio.
Total assert turnover is positive the ratio because the ratio is bigger than the industry upper quartile ratio.
Inventory turnover is positive because it is higher than the industry average. It represents that the company has a high sales based on its inventory.
Receivable turnover is positive because it shows that the company can collect the sales faster.
Debt ratio is positive because it shows that the company has a lower debt risk than the industry average.
Debt-equity ratio is positive because it shows that the company is less aggressive using debt which means the company has relatively lower debt risk.
Equity multiplier is negative because it shows that the