Question

Use the following financial statements for Lake of Egypt Marina, Inc. LAKE OF EGYPT MARINA, INC Balance Sheet as of December 31, 2015 and 2014 (in millions of dollars) 2015 2014 2015 2014 Assets Liabilities and Equity Current assets: Current liabilities: Cash and marketable securities $ 50 $ 56 Accrued wages and taxes $ 50 $ 48 Accounts receivable 60 52 Accounts payable 55 44 Inventory 205 96 Notes payable 60 40 Total $ 315 $ 204 Total $ 165 $ 132 Fixed assets: Long term debt: 42 136 Gross plant and equipment $ 250 $ 232 Stockholders’ equity: Less: Depreciation 90 60 Preferred stock (4 million shares) $ 4 $ 4 Common stock and paid-in surplus (24 million shares) 24 24 Net plant and equipment $ 160 $ 172 Retained earnings 265 104 Other long-term assets 25 24 Total $ 185 $ 196 Total $ 293 $ 132 Total assets $ 500 $ 400 Total liabilities and equity $ 500 $ 400 LAKE OF EGYPT MARINA, INC. Income Statement for Years Ending December 31, 2015 and 2014 (in millions of dollars) 2015 2014 Net sales (all credit) $ 600 $ 400 Less: Cost of goods sold 216 120 Gross profits $ 384 $ 280 Less: Other operating expenses 36 24 Earnings before interest, taxes, depreciation, and amortization (EBITDA) 348 256 Less: Depreciation 30 24 Earnings before interest and taxes (EBIT) $ 318 $ 232 Less: Interest 48 32 Earnings before taxes (EBT) $ 270 $ 200 Less: Taxes 81 60 Net income $ 189 $ 140 Less: Preferred stock dividends $ 4 $ 4 Net income available to common stockholders $ 185 $ 136 Less: Common stock dividends 24 24 Addition to retained earnings $ 161 $ 112 Per (common) share data: Earnings per share (EPS) $ 7.708 $ 5.667 Dividends per share (DPS) $ 1.000 $ 1.000 Book value per share (BVPS) $ 12.042 $ 5.333 Market value (price) per share (MVPS) $ 15.550 $ 13.350 Calculate the following ratios for Lake of Egypt Marina, Inc. as of year-end 2015. (Use sales when computing the inventory turnover and use common stockholders' equity when computing the equity multiplier. Round your answers to 2 decimal places. Use 365 days a year.) LAKE OF EGYPT MARINA, INC. a. Current ratio times b. Quick ratio times c. Cash ratio times d. Inventory turnover times e. Days’ sales in inventory days f. Average collection period days g. Average payment period days h. Fixed asset turnover times i. Sales to working capital times j. Total asset turnover times k. Capital intensity times l. Debt ratio % m. Debt-to-equity times n. Equity multiplier times o. Times interest earned times p. Cash coverage times 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 ratio times y. PE ratio times eBook & Resources eBook: Asset Management Ratios eBook: Debt Management Ratios eBook: Liquidity Ratios eBook: Profitability Ratios

Answer 1

a)	Current Ratio	2015	2014
	Current Assets	315	204
	Current Laibilities	165	132
	= Current Assets / Current Laibilities	1.91	1.55
b)	Quick Ratio
	Quick Assets (Current - Inventory- Prepaid Expense)	110	108
	Current Laibilities	165	132
	= Quick Assets / Current Laibilities	0.67	0.82
c)	Cash ratio
	Cash Assets (Cash + Bank + Marketable Securities)	50	56
	Current Laibilities	165	132
	= Cash Assets / Current Liabilities	0.30	0.42
d)	Inventory Turnover Times
	Net Sales	600	400
	Inventory	205	96
	= COGS / Inventory	2.93	4.17
e)	Days Sale in Inventory
	= 365 / Inventory Turnover Times	124.71	87.60
f)	Average Collection Period Days
	Accounts Receivables	60	52
	Net Credit Sales	600	400
	= (365 * Account Receivables) / Net Credit Sales	36.5	47.45
g)	Average Payment Period
	Accounts Payable	55	44
	Net Credit Purchase (COGS + Closing Inventory - Opening Inventory)	325	?
	= (365 * Accounts Payable) / Net credit Purchases	61.77
h)	Fixed Assets Turnover
	Fixed Assets net of depreciation (PPE + Other)	185	196
	Net Sales	600	400
	= Net Sales / Fixed Assets	3.24	2.04