East Coast Yacht Solution
1-Compute all industry ratios presented for East Coast Yachts and COMPARE and comment on each ratio as compared to the Industry Median. (60pts)
Industry ratios presented for East Coast Yachts
Current ratio = $11,270,000 / $15,030,000
Current ratio = 0.75 times
Quick ratio = ($11,270,000 – 4,720,000) / $15,030,000
Quick ratio = 0.44 times
Total asset turnover = $128,700,000 / $83,550,000
Total asset turnover = 1.54 times
Inventory turnover = $90,700,000 / $4,720,000
Inventory turnover = 19.22 times
Receivables turnover = $128,700,000 / $4,210,000
Receivables turnover = 30.57 times
Total debt ratio = ($83,550,000 – 42,570,000) / $83,550,000
Total debt ratio = 0.49 times
Debt-equity ratio = ($15,030,000 + 25,950,000) / $42,570,000
Debt-equity ratio = 0.96 times
Equity multiplier = $83,550,000 / $42,570,000
Equity multiplier = 1.96 times
Interest coverage = $18,420,000 / $2,315,000
Interest coverage = 7.96 times
Profit margin = $9,663,000 / $128,700,000
Profit margin = 7.51%
Return on assets = $9,663,000 / $83,550,000
Return on assets = 11.57%
Return on equity = $9,663,000 / $42,570,000
Return on equity = 22.70%
Liquidity or Short-Term Solvency Ratios
Calculate and compare to industry ratios: | East Coast Yachts | Lower Quartile | Median | Upper Quartile | Positive, Negative, or Neutral Relative to Industry | Current Ratio | 0.75 | 0.50 | 1.43 | 1.89 | NegativeIt is not positive as it is lower than median. It shows that company has fewer current assets to pay its current liabilities than industrial average. | Quick Ratio | 0.44 | 0.21 | 0.38 | 0.62 | PositiveIt is positive as it little higher than median. It shows that company has little more quick assets than to pay its current liabilities than industrial average. |
Asset Management or Turnover Ratios
Calculate and compare to industry ratios: | East Coast Yachts | Lower Quartile | Median | Upper Quartile | Positive, Negative, or Neutral Relative to Industry | Assets Turnover | 1.54 |
Industry ratios presented for East Coast Yachts
Current ratio = $11,270,000 / $15,030,000
Current ratio = 0.75 times
Quick ratio = ($11,270,000 – 4,720,000) / $15,030,000
Quick ratio = 0.44 times
Total asset turnover = $128,700,000 / $83,550,000
Total asset turnover = 1.54 times
Inventory turnover = $90,700,000 / $4,720,000
Inventory turnover = 19.22 times
Receivables turnover = $128,700,000 / $4,210,000
Receivables turnover = 30.57 times
Total debt ratio = ($83,550,000 – 42,570,000) / $83,550,000
Total debt ratio = 0.49 times
Debt-equity ratio = ($15,030,000 + 25,950,000) / $42,570,000
Debt-equity ratio = 0.96 times
Equity multiplier = $83,550,000 / $42,570,000
Equity multiplier = 1.96 times
Interest coverage = $18,420,000 / $2,315,000
Interest coverage = 7.96 times
Profit margin = $9,663,000 / $128,700,000
Profit margin = 7.51%
Return on assets = $9,663,000 / $83,550,000
Return on assets = 11.57%
Return on equity = $9,663,000 / $42,570,000
Return on equity = 22.70%
Liquidity or Short-Term Solvency Ratios
Calculate and compare to industry ratios: | East Coast Yachts | Lower Quartile | Median | Upper Quartile | Positive, Negative, or Neutral Relative to Industry | Current Ratio | 0.75 | 0.50 | 1.43 | 1.89 | NegativeIt is not positive as it is lower than median. It shows that company has fewer current assets to pay its current liabilities than industrial average. | Quick Ratio | 0.44 | 0.21 | 0.38 | 0.62 | PositiveIt is positive as it little higher than median. It shows that company has little more quick assets than to pay its current liabilities than industrial average. |
Asset Management or Turnover Ratios
Calculate and compare to industry ratios: | East Coast Yachts | Lower Quartile | Median | Upper Quartile | Positive, Negative, or Neutral Relative to Industry | Assets Turnover | 1.54 |