Question

LAKE OF EGYPT MARINA, INC.
Balance Sheet as of December 31, 2018 and 2017
(in millions of dollars)
	2018				2017					2018				2017
Assets									Liabilities and Equity
Current assets:									Current liabilities:
Cash and marketable securities	$	100			$	48			Accrued wages and taxes	$	60			$	48
Accounts receivable		110				72			Accounts payable		110				72
Inventory		301				174			Notes payable		70				60
Total	$	511			$	294			Total	$	240			$	180
Fixed assets:									Long-term debt:	$	429			$	237
Gross plant and equipment	$	520			$	330			Stockholders’ equity:
Less: Depreciation		81				60			Preferred stock (3 million shares)	$	3			$	3
Net plant and equipment	$	439			$	270			Common stock and paid-in surplus		24				24
									(24 million shares)
Other long-term assets		50				36			Retained earnings		304				156
Total	$	489			$	306			Total	$	331			$	183
Total assets	$	1,000			$	600			Total liabilities and equity	$	1,000			$	600

LAKE OF EGYPT MARINA, INC.
Income Statement for Years Ending December 31, 2018 and 2017
(in millions of dollars)
	2018				2017
Net sales (all credit)	$	500			$	400
Less: Cost of goods sold		180				136
Gross profits	$	320			$	264
Less: Other operating expenses		26				24
Earnings before interest, taxes, depreciation, and amortization (EBITDA)		294				240
Less: Depreciation		21				16
Earnings before interest and taxes (EBIT)	$	273			$	224
Less: Interest		23				24
Earnings before taxes (EBT)	$	250			$	200
Less: Taxes		75				60
Net income	$	175			$	140
Less: Preferred stock dividends	$	3			$	3
Net income available to common stockholders	$	172			$	137
Less: Common stock dividends		24				24
Addition to retained earnings	$	148			$	113
Per (common) share data:
Earnings per share (EPS)	$	7.167			$	5.708
Dividends per share (DPS)	$	1.000			$	1.000
Book value per share (BVPS)	$	13.667			$	7.500
Market value (price) per share (MVPS)	$	14.950			$	12.750

Calculate the following ratios for Lake of Egypt Marina, Inc. as of year-end 2018. (Use sales when computing the inventory turnover and use total equity when computing the equity multiplier. Round your answers to 2 decimal places. Use 365 days a year.)

a.Current ratio=2.12 times

b.Quick ratio0.88times

c.Cash ratio0.41times

d.Inventory turnover

e.Days’ sales in inventorydays

f.Average collection perioddays

g.Average payment perioddays

h.Fixed asset turnovertimes

i.Sales to working capitaltimes

j.Total asset turnovertimes

k.Capital intensitytimes

l.Debt ratio%

m.Debt-to-equitytimes

n.Equity multipliertimes

o.Times interest earnedtimes

p.Cash coveragetimes

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 ratiotimes

y.PE ratiotimes

Answer 1

A	B	C	D	E	F	G	H	I
2
3		Current Ratio	=Current Assets / Current Liabilities	2.13	=511/240
4		Quick Ratio	=(Cash + Receivables)/Current Liabilities	0.88	=(100+110)/240
5		Cash Ratio	=Cash and marketable securities/ Current asset	0.42	=100/240
6		Inventory Turnover	=Sales / Average Inventory	2.11	=500/AVERAGE(301,174)
7		Days Sales in inventory	=365 / Inventory turnover	173.38	=365/E6
8		Average collection period	=(365*Average Receivables) / Sales	66.43	=(365*AVERAGE(110,72))/500
9		Average payment period	=(365*Average Accounts Payables) / Cost of Goods Sold	184.53	=(365*AVERAGE(110,72))/180
10		Fixed asset turnover	=Sales / Average net fixed Assets	1.41	=500/AVERAGE(439,270)
11		Sales to working capital	=Sales / Average working capital	2.60	=500/AVERAGE(511-240,294-180)
12		Capital intensity	=Total Assets / Sales	2.00	=1000/500
13