East coast yachts cash flows essay

This is can be summarized by creating the pro forma balance sheet and recalculating the financial ratios.

East Coast Yachts

East Coast Yachts manage to decrease their accounts payable and accrued expenses. Although, this EFN is a significant amount to request it will be realistically paid back using the net income generated by the investment and additional liability. Their profitability margin of 7.

East Coast Yachts have an average debt ratio at. Accounts receivable increased as well, but this could be attributed to an increase in sales of yachts over the course of the year.

The EFN will be used to cover the projected difference between the new assets and liabilities associated with the growth. East Coast Yachts appears to currently be at their sustainable growth rate of They have a healthy current ratio and quick acid-test ratio of 1.

The assumption would be that they repurchased the stock and then reissued a small number of shares at a greater price then purchased. East Coast Yachts really shines based on their asset utilization ratios.

East Coast Yachts Cash Flow Analysis

By gathering more information regarding East Coast Yachts profitability ratios it comes to light that they maintained an average profit margin and return on assets.

Another great indicator of their financial standing is a healthy accounts receivable turnover ratio of Comparing the current financial ratios and financial ratios based on projections for the sustainable growth rate shows that the ratios are very similar and extremely close in value.

This speaks to the financial management decision makers and their expert financial guidance during this period. This is an outstanding number given that their product is a high-end, expensive luxury item. This is good given the current economy and companies do not want to keep a large amount of unsold inventory on hand.

This indicates that they are retiring and issuing new credit every However, their return on equity is a strong Their inventory turnover is excellent and shows they are currently turning over their inventory The wise cash flow management implemented by East Coast Yachts should be emphasized on their cash flow financial statement.

This is important to know because the companies will most likely need to increase their fixed assets to achieve the projected growth and demand associated.

This can be seen as an excellent move as they prepare for future growth. This can also be said of their East Coast Yachts has a strong operating cash flow highlighted by strong earnings before interest and taxes of $88, With the addition of $20, in depreciation and subtraction of $30, in taxes, they managed an operating cash flow of $77, Company Overview East Coast Yachts was founded in by Tom Warren as a sole proprietorship which later became a publicly traded corporation after operations were assumed by his daughter (Ross, ).

The most accurate cash flow statement that describes the cash flows of East Coast Yachts would be the official accounting statement of cash flows. In this exercise there is only on cash flow statement so I would have to say this one would be the most useful when making business decisions. East Coast Yachts generated $M in cash flow from their normal yacht building and sales operations to cover the cash flows from investing and financing activities.

The positive net income of $46M shows that their sales were able. Analyze company cash flows East Coast Yachts has a strong operating cash flow highlighted by strong earnings before interest and taxes of $88, With the addition of $20, in depreciation and subtraction of $30, in taxes, they managed an operating cash flow of $77,

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East coast yachts cash flows essay
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