Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Chris Guthrie was recently hired by Kiwi Yachts Ltd to help the company with its financial planning and to evaluate the company's performance. Chris graduated from university five years ago with a finance degree. He has been employed in the finance department of an S&P/ASX 200 company since then. Kiwi Yachts was founded 10 years ago by friends Mark Kwan and Todd Jovanovich. The company has manufactured and sold large- to medium-sized yachts over this period, and the company's products have received high reviews for safety, performance and reliability. The company has a niche market in that it sells primarily to individuals who own, sail and race their own yachts. The company has two base models: the Swordfish, which sells for $53 000; and the Shark, which sells for $78 000. While the company manufactures yachts, its operations are different from those of many commercial boating companies. Kiwi Yachts builds yachts to order. By using prefabricated parts, the company is able to complete the manufacture of a yacht in only five weeks. The company also receives a deposit on each order, as well as another partial payment before the order is complete. In contrast, other commercial yacht builders may take 18 months to two years to manufacture once the order is placed. Mark and Todd have provided the following financial statements. Chris has gathered the industry ratios for the boating manufacturing industry: Kiwi Yachts Ltd 2014 Income Statement Sales $24 092 400 Cost of goods sold 17 982 000 Other expenses 2 878 800 Depreciation 786 000 EBIT $ 2 445 600 Interest 434 400 Taxable income $ 2 011 200 Taxes 804 480 Net income $ 1 206 720 Dividends $246 000 Additions to retained earnings 960 720 \Kiwi Yachts Ltd 2014 Balance Sheet Assets Liabilities and Equity Current assets Current liabilities Cash $ 438 048 Accounts payable $ 858 816 Accounts receivable 1 841 616 Notes payable 1 735 680 Inventory 1 486 200 Total current liabilities $ 2 594 496 Total current assets $ 3 765 864 Fixed assets Long-term debt $ 4 590 000 Net plant and equipment $14 778 816 Shareholder equity Ordinary shares 180 000 Retained earnings 11 180 184 Total equity $11 360 184 Total assets $18 544 680 Total liabilities and equity $18 544 680 Boating Manufacturing Industry Ratios Lower Quartile Median Upper Quartile Current ratio 0.5 1.43 1.89 Quick ratio 0.21 0.38 0.62 Cash ratio 0.08 0.21 0.39 Total asset turnover 0.68 0.85 1.38 Inventory turnover 4.89 6.15 10.89 Receivables turnover 6.27 9.8214.11 Total debt ratio 0.44 0.52 0.61 Debt-equity ratio 0.791.08 1.56 Equity multiplier 1.79 2.08 2.56 Times interest earned 5.18 8.06 9.83 Cash coverage ratio 5.84 8.43 10.27 Profit margin 4.05% 6.98% 9.87% Return on assets 6.05% 10.53% 13.21% Return on equity 9.93% 16.54% 26.15% Based on the above information, answer the following questions: •a) Calculate the following ratios for Kiwi Yachts: current ratio, quick ratio, cash ratio, total asset turnover, inventory turnover, receivables turnover, total debt ratio, debt-equity ratio, equity multiplier, times interest earned, cash coverage ratio, profit margin, return on assets and return on equity. •b) Compare the performance of Kiwi Yachts to the industry. For each ratio, comment on why it might be viewed as positive or negative relative to the industry.
What are the two major segments of the foreign exchange market, and what types of foreign exchange instruments are traded within these markets?
Explain decision making on the basis of the IRR and NPV criterion and Compute the net present value for each project if the firm has a 10% cost of capital. Which project should be adopted
What is the Efficient Market Hypothesis, what are is three forms, AND what are its implications?
Thus, the trader receives a net credit of $200 when entering the spread position. If the stock rises to $50, then what is the trader's profit?
Make a short description comparing Sirius Satellite Radio and XM Satellite Radios recent fiscal years statements based on the profitability ratios and efficiency levels.
How price sensitive does this product appear to be, based on your conjoint analysis? What specific price/market information lead you to this conclusion. Be specific.
After the training session on monetary policy and its ability to influence the money supply, you determine focus on the other key role of Fed, which is regulating the nation's banks.
What was the net rate of return on this investment, assuming you are in the US and measure your return in terms of USD?
If the company sells the watch for $25, the fixed costs are $140,000, and variable costs are $15 per watch. What is the beak-even quantity of the company?
Computation of total interest on the investment and how much total interest income would the money market lender receive
A small business is receiving a 5 year $1,000,000 loan at a subsidized rate of 3% per year. The firm will pay 3 percent annual interest payment each year and the principal at the end of 5 years.
Name two financing options that are available to corporations. What are the benefits and disadvantages of each? Credit Scoring . Discuss the problems with developing a numerical credit scoring system for evaluating personal loans. You can only test ..
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd