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linda_us, Master's Degree
Category: Multiple Problems
Satisfied Customers: 1402
Experience:  A tutor for Business, Finance, Accounts and other related topics.
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How do I get the answer the the question posted

Customer Question

how do I get the answer the the question posted
Submitted: 1 year ago.
Category: Multiple Problems
Expert:  Cher replied 1 year ago.

Hello, and welcome!

Please post the question and I'll let you know if I can help.



Customer: replied 1 year ago.
1. Calculate all of the ratios listed in the industry table for East Coast Yachts. 2. Compare the performance of East Coast Yachts to the industry as a whole. For each ratio, comment on why it might be viewed as positive or negative relative to the indus- try. Suppose you create an inventory ratio calculated as inventory divided by current liabilities. How do you interpret this ratio? How does East Coast Yachts compare to the
industry average? 3. Calculate the sustainable growth rate of East Coast Yachts. Calculate external funds
needed (EFN) and prepare pro forma income statements and balance sheets assuming growth at precisely this rate. Recalculate the ratios in the previous question. What do you observe?
4. As a practical matter, East Coast Yachts is unlikely to be willing to raise external equity capital, in part because the owners don’t want to dilute their existing ownership and control positions. However, East Coast Yachts is planning for a growth rate of 20 per- cent next year. What are your conclusions and recommendations about the feasibility of East Coast’s expansion plans?
5. Most assets can be increased as a percentage of sales. For instance, cash can be increased by any amount. However, fixed assets often must be increased in specific amounts because it is impossible, as a practical matter, to buy part of a new plant or machine. In this case a company has a “staircase” or “lumpy” fixed cost structure. Assume that East Coast Yachts is currently producing at 100 percent of capacity. As a result, to expand production, the company must set up an entirely new line at a cost of $30 million. Calculate the new EFN with this assumption. What does this imply about capacity utilization for East Coast Yachts next year?
Customer: replied 1 year ago. question with back up from your site
Expert:  Cher replied 1 year ago.

Hi again,

I'm sorry, this is out of my areas of expertise, so I will opt out and another expert will answer you shortly.

Good luck with your assignment,


Expert:  F. Naz replied 1 year ago.


Please mention the length and deadline, thanks.