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The following financial statements for Lake of Egypt Marina, Inc.
| 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 | $ | 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, 2018 and 2017 | |
| (in millions of dollars) | |
| | 2018 | | 2017 |
| 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 | | 57 | | | | 55 | |
| Net income | $ | 143 | | | $ | 127 | |
| Less: Preferred stock dividends | $ | 5 | | | $ | 5 | |
| Net income available to common stockholders | $ | 138 | | | $ | 122 | |
| Less: Common stock dividends | | 65 | | | | 65 | |
| Addition to retained earnings | $ | 73 | | | $ | 57 | |
| Per (common) share data: | | | | | | | |
| Earnings per share (EPS) | $ | 2.123 | | | $ | 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 | |
| |
| | Lake of Egypt Marina, Inc. | Industry |
| a. | Current ratio | 2.00 | times |
| b. | Quick ratio | 1.20 | times |
| c. | Cash ratio | 0.25 | times |
| d. | Inventory turnover | 3.60 | times |
| e. | Days sales in inventory | 101.39 | days |
| f. | Average collection period | 32.50 | days |
| g. | Average payment period | 45.00 | days |
| h. | Fixed asset turnover | 1.25 | times |
| i. | Sales to working capital | 4.25 | times |
| j. | Total asset turnover | 0.85 | times |
| k. | Capital intensity | 1.18 | times |
| l. | Debt ratio | 62.50 | % |
| m. | Debt-to-equity | 1.67 | times |
| n. | Equity multiplier | 2.67 | times |
| o. | Times interest earned | 8.50 | times |
| p. | Cash coverage | 8.75 | times |
| q. | Profit margin | 28.75 | % |
| r. | Gross profit margin | 56.45 | % |
| s. | Operating profit margin | 46.78 | % |
| t. | Basic earnings power | 32.50 | % |
| u. | ROA | 19.75 | % |
| v. | ROE | 36.88 | % |
| w. | Dividend payout | 35.00 | % |
| x. | Market-to-book ratio | 2.55 | times |
| y. | PE ratio | 15.60 | times |
| |
Using the ratios for Lake of Egypt Marina shown above, what can you conclude about Lake of Egypt Marinas financial performance for 2018?
liquidity ?
Asset management ?
Profit ratio?
Answer & Explanation
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