Question

Use 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 S 72 $ 48 Accrued wages and $ 56 $ 54 securities taxes Accounts receivable 80 60 Accounts payable 80 66 Inventory 294 186 Notes payable 48 54 Total $ 446 $294 Total $184 $174 Fixed assets: Long-term debt: $376 $240 Gross plant and $400 $336 Stockholders' equity: equipment 86 Preferred stock (6 Less: Depreciation 66 sasa million shares) Common stock and paid- Net plant and in surplus equipment $314 $270 (24 million shares) 24 24 Other long-term 40 36 Retained earnings 210 156 assets Total $354 $306 Total $240 $186 Total assets $800 $600 Total liabilities and $800 $600 equity

Answer 1

Note: As per answering guidelines, only the first four ratios can be answered.

Solution:-

(k) Capital intensity ratio = Total assets/Revenue = 800/400 = 2

(l) Debt ratio= Total debt/total assets = (Long term debt + Notes payable)/total assets = (376+48)/800 = 53%

(m) Debt to equity= Total debt/Total equity = (Long term debt + Notes payable)/total stockholder's equity= (376+48)/240 = 1.77 times

(n) Equity multiplier = Total assets/Total stockholder's equity= 800/240 = 3.33 times