Responsibility matrixes What do you observe? This is an indicator of strong sales performance and liquidity level of ECY. But it also means that ECY do well collecting cash quickly from customers and be able to generate cash flow to keep up with current liabilities.
Most assets can be increased as a percentage of sales. What does this imply about capacity utilization for East Coast Yachts next year? Compared to Yacht Industy which the profit margin ratio of ECY between the median and upper quartile, so it is positive because Profit margin is very useful when comparing companies in similar industries.
Performance of ECY to the industry as a whole: 1. For each ratio, comment on why it might be viewed as positive or negative relative to the industry.
A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. What long-term investments to make? Suppose you create an inventory ratio calculated as inventory divided by current liabilities.
Compare the performance of East Cost Yacht to the industry as a hole. It is positive compared to Yacht Industry average which the debt ratio is 0,52 times — higher portion of debs compared to the assets. When the interest coverage ratio is smaller than 1, the company is not generating enough cash from its operations EBIT to meet its interest obligations.