Use the following financial statements for Lake of Egypt Marina, Inc. LAKE OF EG
ID: 2812980 • Letter: U
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 $ 45 $ 36 Accrued wages and taxes $ 40 $ 20
Accounts receivable 40 32 Accounts payable 35 24
Inventory 223 148 Notes payable 30 32
Total $ 308 $ 216 Total $ 105 $ 76
Fixed assets: Long term debt: 67 200
Gross plant and equipment $ 255 $ 200 Stockholders’ equity:
Less: Depreciation 88 40 Preferred stock (4 million shares) $ 4 $ 4
Common stock and paid-in
surplus (16 million shares) 16 16
Net plant and equipment $ 167 $ 160 Retained earnings 308 104
Other long-term assets 25 24
Total $ 192 $ 184 Total $ 328 $ 124
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) $ 800 $ 600
Less: Cost of goods sold 320 192
Gross profits $ 480 $ 408
Less: Other operating expenses 64 36
Earnings before interest, taxes, depreciation, and
amortization (EBITDA) 416 372
Less: Depreciation 48 30
Earnings before interest and taxes (EBIT) $ 368 $ 342
Less: Interest 48 42
Earnings before taxes (EBT) $ 320 $ 300
Less: Taxes 96 90
Net income $ 224 $ 210
Less: Preferred stock dividends $ 4 $ 4
Net income available to common stockholders $ 220 $ 206
Less: Common stock dividends 16 16
Addition to retained earnings $ 204 $ 190
Per (common) share data:
Earnings per share (EPS) $ 13.750 $ 12.875
Dividends per share (DPS) $ 1.000 $ 1.000
Book value per share (BVPS) $ 20.250 $ 7.500
Market value (price) per share (MVPS) $ 15.100 $ 12.900
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
Explanation / Answer
As per rules I will answer the first 4 sub parts of the question
a. Current ratio= current assets/ current liabilities
2015 = 308/105= 2.93 times
2014= 216/76 = 2.84
b. Quick ratio= (Cash and marketable securities+ AR)/ Current liabilities
2015 = (45+40)/105= 0.81
2014 = (36+32)/76 = 0.89
c. Cash ratio= Cash and marketable securities/Current liabilities
2015= 45/105= 0.43
2014= 36/76 = 0.47
d. Inventory turnover= COGS/ Average inventory
2015 = 320/((223+148)/2) = 1.73 times
2014 using closing inventory value since previous years inventory is not given= 192/148= 1.3 times
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