Listedhere, are the 2015 and 2016 balance sheets

Otago Bay Marine Motors Balance Sheets ($ in thousands)

As of December 31,

2016 2015

Assets

Current assets

Cash and cash equivalents 56,627 88,512

Accounts receivable, net of allowances 18,005 10,835

Inventories 28,144 23,010

Prepaid expenses 5,421 6,114

Total current assets 108,197 128,471

Property, plant, and equipment, at cost 138,233 83,974

Less: Accumulated depreciation and amortization -49,955 -42,816

Net fixed assets 88,278 41,158

Other assets 102,163 50,844

Total assets 298,638 220,473

Liabilities and Shareholders' Equity

Current liabilities

Notes and accounts payable 26,419 5,542

Dividends payable 899 820

Accrued liabilities 19,817 14,635

Total current liabilities 47,135 20,997

Noncurrent liabilities

Long-term debt 39,534 19,433

Shareholders' equity

Common stock 6,850 7,279

Capital in excess of par value 111,258 86,386

Retained earnings 93,861 86,378

Total shareholders' equity 211,969 180,043

Total liabilities and equity 298,638 220,473

Average number of common shares outstanding 10,315,000 10,315,000

, and income statements

,Otago Bay Marine Motors Income Statements ($ in thousands)

For the Year For the Year

Ended December 31, Ended December 31,

2016 2015

Sales revenue 260,723 245,349

Cost of goods sold 134,739 125,121

Gross profit margin 125,984 120,228

Operating expenses 73,732 69,826

Earnings from operations 52,252 50,402

Other income (expense), net 5,906 1,556

Earnings before income taxes 58,158 51,958

Provision for income taxes 22,100 19,744

Net earnings 36,058 32,214

Cash dividends ($0.34 and $0.21 per share) 3,507 2,166

Average price per share of common stock

(in the fourth quarter of the year) 71.37 83.07.

, for Otago Bay MarineMotors, a major manufacturer oftop-of-the-line outboard motors.

a. On the basis of the informationprovided, calculate the following financial ratios for 2015 and 2016:

Otago Bay Marine Motors

2016 2015 Industry Averages

(for 2010)

Current ratio 2.46

Total asset turnover 1.29

Debt-equity ratio 9.64%

Net profit margin 9.38%

ROA 16.21%

ROE 19.47%

EPS $1.76

P/E ratio 17.55

Dividend yield 0.36%

Payout ratio 25.01%

Price-to-book-value ratio 6.59.

.

b. Considering the financial ratios youcomputed, along with the industryaverages, how would you characterize the financial condition of Otago Bay MarineMotors? Explain.

Answer rating: 100% (QA)

Analyzing Otago Bay Marine Motors Financials a Financial Ratios Based on the provided information I can calculate the following financial ratios for O... View the full answer