The Bullock Gold Mining and a Job at East Coast Yachts Essay

The Bullock Gold Mining and a Job at East rim Yachts - Essay Exampleatio. This shows that the steady has less liquidity comp atomic number 18d to the industry. Current proportion is greater than the lower berth quartile this implies that there exist other firms with less liquidity within the industry (Ehrhardt & Eugene, 91). The firm whitethorn posses more expected cash flows, or easier means to short-term debt. The turnover ratios appear to be greater compared to the industry median actually all are greater than the upper quartile. This implies that the firm utilizes its assets efficiently to generate sales. The financial leverage ratios appear to be lower than the industry median but higher than the lower quartile. ... East Coast Yachts has a satisfactory performance, although attention is needed in the liquidity ratios. c) Creating neckcloth Ratio Inventory to catamenia liabilities ratio East Coast Yachts is lower, the current ratio is lower, but the quick ratio is higher in comparison to the industry median. This means that East Coast Yachts has few stock to current liabilities compared to the industry median (Ehrhardt & Eugene, 92). Since the cash ratio is less compared to the industry median, East Coast Yachts has fewer stock compared to the industry median, but more accounts receivable. d)Interpretation of the Ratios Current ratio unassailable (Well managed current accounts.) Bad (Liquidity issues) Quick ratio Good (Well managed current accounts.) Bad (Liquidity issues) Total asset turnover Good (Well utilized assets.) Bad (Old and depreciated assets) Inventory turnover Good (Well managed inventory) Bad (Inventory shortages) Receivables turnover Good (Well collected receivables) Bad (Strict credit terms) Total debt ratio Good (Hard to get credit issues) Bad (Increase shareowner returns) Debt equity Ratio Good (Hard to get credit issues) Bad (Increase shareholders equity) Equity multiplier Good (Hard to get credit issues) Bad (Increase shareholders equity) Interest coverage Good (Hard to get CREDIT ISSUES) Bad (Increase shareholders equity) Profit margin Good (Good performance) (Bad Good cost control) Question 3 a)Internal growth rate, ROE = (Net income)/(Total equity) = $12,562,200/$ 55,341,000 = 0.2270 or 22.70% b (Addition to carry earnings)/(Net income) = $5,024,800/$12,562,200 = 0.40 or 40% Sustainable growth rate = (ROE ? b)/(1-(ROE ? b)) = (0.2270 ? 0.40)/(1-(0.2270 ? 0.40)) = 0.0999 or 9.99% Income Statement Sales