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

The Bullock Gold Mining and a Job at East Coast Yachts - shew Exampleatio. This shows that the firm has less liquidity compared to the industry. Current symmetry is greater than the lower quartile this implies that there constitute other firms with less liquidity within the industry (Ehrhardt & Eugene, 91). The firm may posses more(prenominal) expected funds flows, or easier means to short-term debt. The turnover ratios be to be greater compared to the industry median very 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 Inventory Ratio Inventory to current liabilities ratio East Coast Yachts is lower, the current ratio is lower, but the quick ratio is higher in similitude to the i ndustry median. This means that East Coast Yachts has few stock to current liabilities compared to the industry median (Ehrhardt & Eugene, 92). Since the capital 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 Good (Well managed current accounts.) severeness (Liquidity issues) Quick ratio Good (Well managed current accounts.) self-aggrandising (Liquidity issues) Total asset turnover Good (Well utilized assets.) drab (Old and depreciated assets) Inventory turnover Good (Well managed inventory) Bad (Inventory shortages) Receivables turnover Good (Well collected receivables) Bad (Strict address terms) Total debt ratio Good (Hard to get credit issues) Bad (Increase shareholder returns) Debt equity Ratio Good (Hard to get credit issues) Bad (Increase shareholders equity) Equity multiplier Good (Hard to get credit issues) Bad (Increase sharehold ers 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 Retained 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