Financial Ratios for East Coast Yachts Free Essays

Question 1: Financial proportions for East Coast Yachts: Current ratio| =| Current Assets| | Debt-value ratio| =| Total liabilities| | Current Liabilities| | Total equity| | =| $14,651,000 | =| $19,539,000 + $33,735,000| | $19,539,000 | $55,341,000 | =| 0. 75| | =| 0. 96| | Quick ratio| =| Current Assets †Inventory| | Equity multiplier| =| Total assets| | Current Liabilities| | Total equity| | =| $14,651,000 †$6,136,000| | =| $108,615,000 | $19,539,000 | $55,341,000 | =| 0. We will compose a custom article test on Money related Ratios for East Coast Yachts or on the other hand any comparative theme just for you Request Now 44| | =| 1. 96| | Total resource turnover| =| Sales| | Interest coverage| =| EBIT| | Total Assets| | Interest| | =| $167,310,000 | =| $23,946,000 | $108,615,000 | $3,009,000 | =| 1. 54| | =| 7. 96| | Inventory turnover| =| COGS| | Profit margin| =| Net Income| | Inventory| | Sales| | =| $117,910,000 | =| $12,562,200 | $6,136,000 | $167,310,000 | =| 19. 22| | =| 7. 51%| | Receivables turnover| =| Sales| | Return on assets| =| Net Income| | Accounts receivable| | Total assets| =| $167,310,000 | =| $12,562,200 | $5,473,000 | $108,615,000 | =| 30. 57| | =| 11. 57%| | Debt ratio| =| Total resources †Total equity| | Return on equity| =| Net Income| | Total assets| | Total equity| | =| $108,615,000 †$55,341,000| | =| $12,562,200 | $108,615,000 | $55,341,000 | =| 0. 49| | =| 22. 70%| | Question 2: | East Coast Yachts| | Yacht Industry Ratios| | Lower Quartile| Median| Upper Quartile| Current ratio| | 0. 75| | 0. 50| 1. 43| 1. 9| Quick ratio| | 0. 44| | 0. 21| 0. 38| 0. 62| Total re source turnover| | 1. 54| | 0. 68| 0. 85| 1. 38| Inventory turnover| | 19. 22| | 4. 89| 6. 15| 10. 89| Receivables turnover| | 30. 57| | 6. 27| 9. 82| 14. 11| Debt ratio| | 0. 49| | 0. 44| 0. 52| 0. 61| Debt-value ratio| | 0. 96| | 0. 79| 1. 08| 1. 56| Equity multiplier| | 1. 96| | 1. 79| 2. 08| 2. 56| Interest coverage| | 7. 96| | 5. 18| 8. 06| 9. 83| Profit margin| | 7. 51%| | 4. 05%| 6. 98%| 9. 87%| Return on assets| | 11. 57%| | 6. 05%| 10. 53%| 13. 21%| Return on equity| | 22. 70%| | 9. 93%| 16. 54%| 26. 15%| The liquidity proportion shows that the organization has less liquidity as contrast with the entire business. East Coast Yachts current proportion is beneath the middle business proportion and the fast proportion is situated at the middle business proportion. This shows the organization may access to transient getting. Alluding to the turnover proportion, all the three proportions, I. e. absolute resource turnover, stock turnover and receivables turnover are higher than upper quartile industry proportion. This demonstrates the organization is increasingly proficient among the entire business in utilizing its advantages for produce deals. The money related influence proportions, which incorporate the obligation proportion, obligation value proportion, value multiplier and premium inclusion, are all beneath the middle business proportion, yet higher than the lower quartile. This shows East Coast Yachts is having less obligation than different organizations in the business, yet is still inside the ordinary range. The overall revenue, return on resources just as profit for value of the organization are higher than the business middle. This shows the company’s productivity is performing admirably among the entire business. As an in general, East Coast Yachts is performing great in the business, while more fixation would just be required to be set on the liquidity proportions. Question 3: Return on value = 22. 70% Retention proportion (b)| =| Net pay †Dividends| | Net Income| | =| $12,562,200 †$7,537,320| | $12,562,200 | =| 40%| Sustainable development rate (SGR) = Return on value x Retention proportion = 22. 70% x 0. 4 = 9. 08% Increase in assets| =| Assets| x| ? Sales| | Sales| | =| $108,615,000 | x| (167,310,000 x 9. 08%)| | $167,310,000 | =| $9,862,242. 00 | Increment in unconstrained liabilities| =| Spontaneous liabilities| x| ? Sales| | Sales| | =| $6,461,000 | x| (167,310,000 x 9. 08%)| | $167,310,000 | =| $ 586,658. 80 | Retention proportion (b)| =| Addition to RE| | Net income| | =| $5,024,880 | $12,562,200 | =| 40%| | Profit margin| =| Net income| | Sales| | =| $12,562,200 | $167,310,000 | =| 8%| | Increase in equity| =| PM x Projected deals x maintenance ratio| | =| 8% x ($167,310,000 x 1. 0908) x 0. 4| | =| $5,840,055. 94 | External Funds Needed (EFN)| =| Increase in resources †Increase in unconstrained liabilities †Increase in equity| | =| $9,862,242. 00 †$586,658 †$5,840,056| | =| $3,435,527. 26 | East Coast Yachts| | Pro forma Income Statement| | Sales| | 182,501,748| | Cost of products sold| | 128,616,228| | Other expenses| | 21,809,455| | Depreciation| | 5,460,000| (Assume constant)| Earnings before premium and duties (EBIT)| 26,616,065| | Interest| | 3,009,000| (Assume constant)| Available income| | 23,607,065| | Taxes (40%)| | 9,442,826| | Net Income| | 14,164,239| | Dividends| | 8,221,709| | Addition to RE| | 5,481,139| | East Coast Yachts| | Pro forma Balance Sheet| | Assets| | Current assets| | Cash| | 3,318,214| | Accounts receivable| | 5,969,948| | Inventory| | 6,693,149| | Total| | 15,981,311| | Fixed assets| | Net plant and equipment| | 102,495,931| | Total assets| | 118,477,242| | Liabilities| | Current liabilities| | Accounts payable| | 7,047,659| | Notes payable| | 14,265,482| | Total| | 21,313,141| | Long term debt| | 33,735,000| | Shareholders’ equity| | Common stock| | 5,200,000| | Retained earnings| | 54,693,803| | Total equity| | 59,893,803| | Total liabilities and equity| | 114,941,944| | EFN| | 3,535,298| | Current ratio| =| Current Assets| | Debt-value ratio| =| Total liabilities| | Current Liabilities| | Total equity| | =| $15,981,311 | =| $21,313,141 + $33,735,000| | $21,313,141 | 59,893,803 | =| 0. 75| | =| 0. 92| | Speedy ratio| =| Current Assets †Inventory| | Equity multiplier| =| Total assets| | Current Liabilities| | Total equity| | =| $15,981,311 †$6,693,149| | =| $118,477,242 | $21,313,141 | $59,893,803 | =| 0. 44| | =| 1. 98| | Total resource turnover| =| Sales| | Interest coverage| =| EBIT| | Total Assets| | Interest| | =| $182,501,748 | =| $26,616,065 | $118,477,242 | $3,009,000 | =| 1. 54| | =| 8. 85| | Inventory turnover| =| COGS| | Profit margin| =| Net Income| | Inventory| | Sales| =| $128,616,228 | =| $14,164,239 | $6,693,149 | $182,501,748 | =| 19. 22| | =| 7. 76%| | Receivables turnover| =| Sales| | Return on assets| =| Net Income| | Accounts receivable| | Total assets| | =| $182,501,748 | =| $14,164,239 | $5,969,948 | $118,477,242 | =| 30. 57| | =| 11. 96%| | Debt ratio| =| Total resources †Total equity| | Return on equity| =| Net Income| | Total assets| | Total equity| | =| $118,477,242 †$59,893,803| | =| $14,164,239 | $118,477,242 | $59,893,803 | =| 0. 49| | =| 23. 5%| | East Coast Yachts| | Original ratios| | Based on genius forma| Current ratio| | 0. 75| | 0. 75| Quick ratio| | 0. 44| | 0. 44| Total resource turnover| | 1. 54| | 1. 54| Inventory turnover| | 19. 22| | 19. 22| Receivables turnover| | 30. 57| | 30. 57| Debt ratio| | 0. 49| | 0. 49| Debt-value ratio| | 0. 96| | 0. 92| Equity multiplier| | 1. 96| | 1. 98| Interest coverage| | 7. 96| | 8. 85| Profit margin| | 7. 51%| | 7. 76%| Return on assets| | 11. 57%| | 11. 96%| Return on equity| | 22. 70%| | 23. 65%| As noted from over, the liquidity and turnover proportion will stay consistent expecting development definitely at 9. 8%. Obligation value proportion will diminished marginally while value multiplier and intrigue inclusion expanded, accepting interest stay steady. Slight improvement additionally noted from overall revenue, return on resources and profit for value. Question 4: Growth rate| | 20%| | Increase in assets| =| Assets| x| ? Sales| | Sales| | =| $108,615,000 | x| (167,310,000 x 20%)| | $167,310,000 | =| 21,723,000. 00 | Increase in unconstrained liabilities| =| Spontaneous liabilities| x| ? Sales| | Sales| | =| $6,461,000 | x| (167,310,000 x 20%)| | $167,310,000 | =| $1,292,200. 00 | Retention proportion (b)| =| Addition to RE| | Net income| | =| $5,024,880 | $12,562,200 | =| 40%| | Profit margin| =| Net income| | Sales| | =| $12,562,200 | $167,310,000 | =| 8%| | Increase in equity| =| PM x Projected deals x maintenance ratio| | =| 8% x ($167,310,000 x 1. 2) x 0. 4| | =| $6,424,704. 00| | External Funds Needed (EFN)| =| Increase in resources †Increase in unconstrained liabilities †Increase in equity| | =| $21,723,000. 0 †$1,292,200. 00 †$6,424,704. 00| | =| $14,006,096. 00| | | East Coast Yachts| | Pro forma Income Statement| | Sales| | 200,772,000| | Cost of products sold| | 141,492,000| | Other expenses| | 23,992,800| | Depreciation| | 5,460,000| (Assuming constant)| Earnings before premium and charges (EBIT)| 29,827,2 00| | Interest| | 3,009,000| (Assuming constant)| Taxable income| | 26,