Question

Use the following financial statements for Lake of Egypt Marina, Inc.

LAKE OF EGYPT MARINA, INC.
Balance Sheet as of December 31, 2021 and 2020
(in millions of dollars)
	2021				2020					2021				2020
Assets									Liabilities and Equity
Current assets:									Current liabilities:
Cash and marketable securities	$	75			$	65			Accrued wages and taxes	$	40			$	43
Accounts receivable		115				110			Accounts payable		90				80
Inventory		200				190			Notes payable		80				70
Total	$	390			$	365			Total	$	210			$	193
Fixed assets:									Long-term debt:	$	300			$	280
Gross plant and equipment	$	580			$	471			Stockholders’ equity:
Less: Depreciation		110				100			Preferred stock (5 million shares)	$	5			$	5
Net plant and equipment	$	470			$	371			Common stock and paid-in surplus
									(65 million shares)		65				65
Other long-term assets		50				49			Retained earnings		330				242
Total	$	520			$	420			Total	$	400			$	312
Total assets	$	910			$	785			Total liabilities and equity	$	910			$	785

LAKE OF EGYPT MARINA, INC.
Income Statement for Years Ending December 31, 2021 and 2020
(in millions of dollars)
	2021				2020
Net sales (all credit)	$	515			$	432
Less: Cost of goods sold		230				175
Gross profits	$	285			$	257
Less: Other operating expenses		30				25
Earnings before interest, taxes, depreciation, and amortization (EBITDA)	$	255			$	232
Less: Depreciation		22				20
Earnings before interest and taxes (EBIT)	$	233			$	212
Less: Interest		33				30
Earnings before taxes (EBT)	$	200			$	182
Less: Taxes		42				55
Net income	$	158			$	127
Less: Preferred stock dividends	$	5			$	5
Net income available to common stockholders	$	153			$	122
Less: Common stock dividends		65				65
Addition to retained earnings	$	88			$	57
Per (common) share data:
Earnings per share (EPS)	$	2.354			$	1.877
Dividends per share (DPS)	$	1.000			$	1.000
Book value per share (BVPS)	$	6.077			$	4.723
Market value (price) per share (MVPS)	$	14.750			$	12.550

h) Fixed asset turnover

i) Sales to working capital

j) Total asset turnover

k) Capital intensity

l) Debt ratio

m) Debt-to-equity

n) Equity multiplier

o) Times interest earned

p) Cash coverage

q) Profit margin

r) gross profit margin

s) Operating profit margin

t) Basic earnings power

u) ROA

v) ROE

w) Dividend payout

x) Market-to-book ration

y) PE ratio

Answer 1

Assumption : Since in this question nothing is mentioned that we have to calculate the ratios for 2 years or for current year 2021 so we assumed that ratios required are for current year only and where ever required in formula we took average value using the financial statements for 2020. Solution as under for year 2021:

	Formula	Year 2021	Explaination
h)Fixed asset turnover	Fixed asset turnover=Net sales/Average Fixed Asset	515/((520+420)/2)=1.09574	Where Net sales =515 million$(given in income statement for 2021) and average fixed asset=(opening fixed asset +closing fixed asset/2). Here opening fixed asset is closing balance of fixed asset at end of year 2020.(i.e420million$). Closing fixed asset is fixed asset at end of year 2021(i.e 520million$)
i) Sales to working capital	Average net sales/ working capital( Here working capital is the difference between current assets and current liabilities)	515/(390-210)=2.86	here 515 million $ is net sales for year 2021, 390 million $ is current assets and 210 million $ is current liabilities. There fore working capital=current asset - current liabilities
j) Total asset turnover	Net sales/ Average total Assets(Here Average total assets is (opening total asset+ closing total assets)/2)	515/((910+785)/2)=0.607	Here 515 million $ is net sales for year 2021, 910 million $ is closing balance of total assets and 785 million $ is opening balance of total assets for year 2021
k) Capital intensity	Total Asset/ Sales	910/515=1.766	Here 515 million $ is net sales for year 2021, 910 million $ is closing balance of total asset for year 2021

Hope this resolves the query.