East coast yachts case study

ASSIGNMENT FOR MANAGERIAL ACCOUNTING AND FINANCE
RATIOS AND FINANCIAL PLANNING AT EAST COAST YACTHS

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

Current Ratio = Current Asset / Current Liabilities = $14,651,000.00 / $ 19,539,000 = 0.749 @ 0.75 ( Lower Quartile)

Quick Ratio = (Current Asset – Inventory) / Current Liability = ($14,651,000 - $6,136,000) / $19,539,000 = $8,515,000 / $19,539,000 = 0.436 @ 0.44 (Median)

Total Asset Turnover = Sales / Total Assets = $167,310,000 / $108,615,000 = 1.540 @ 1.54 (Upper Quartile) Inventory Turnover = Cost of Goods Sold / Inventory = $117,910,000 / $6,136,000 = 19.216 @ 19.22 (Upper Quartile)

Receivables Turnover = Sales / Accounts Receivable = $167,310,000 / $5,473,000 = 30.570 @ 30.57 (Upper Quartile)

Debt Ratio @ Total Debt Ratio = (Total Asset – Total Equity) / Total Asset = ($108,615,000 - $55,341,000) / $108,615,000 = $53,274,000 / $108,615,000 = 0.490 @ 0.49 (Lower Quartile)

Debt-equity Ratio = Total Debt / Total Equity = $33,735,000 / $55,341,000 = 0.609 / 0.61 (Lower Quartile?)

Equity Multiplier = Total Asset / Total Equity = $108,615,000 / $55,341,000 = 1.962 @ 1.96 (Lower Quartile)

Interest Coverage = Earnings Before Interest and Taxes (EBIT) / Interest Expense = (Revenue – Operating Expenses) / Interest Expense = $23,946,000 / $3,009,000 = 7.958 @ 7.96 (Lower Quartile)

Profit Margin = Net Income / Sales = $12,562,200 / $167,310,000 = 0.075 @ 0.08 x 100 =7.51% (Median)
Return of Assets = Net Income / Total Assets = $12,562,200 / $108,615,000 = 0.116 @ 0.12 x 100 = 11.57% (Median)

Return on