East Coast Yacht Company Case Study
East Coast Yachts Company
Case Study
Group 4
Julie Ciarlante
Mary Kathryn LoConte
Ivy Perez
David Zhu
East Coast Yachts Background
• ECY started in 2002 as a Limited Liability Company (LLC) with the mission of creating custom, high performance yachts for the pleasure sailor.
• A commitment to safety, reliability and customer satisfaction helped the company grow steadily for the first seven years in business.
• In 2009, the economic downturn and credit crunch hit the boat industry hard and kept the industry flat through 2010.
East Coast Yachts Today
• ECY was able to survive the most devastating years in the industry’s recent history. • In 2011 business started to pick up and by 2012 ECY was maximizing shareholder equity with some of the strongest ROE ratios in the industry.
• The Global Recreational Boating Industry Analysis and Forecast predicts that the industry will continue to grow over the next three years.
East Coast Yachts Industry Trends
• It is expected that the global boat market will go from $18.16 billion in
2010 to $27.8 billion in 2015 with a
Compounded Annual Growth Rate
(CAGR) of 8.9%.
• One of the specific boat building trends is an ongoing shift in product mix toward larger and more expensive boats.
• ECY is focused on being part of the industry growth and established strategic financial planning as an immediate goal.
Source NNMA 2012
East Coast Yachts Strategy
• To achieve this goal, Dan Ervin was hired to evaluate ECY’s financial performance and create short-term financial plans.
• The Financial Gurus from Group 4 were retained to assist with analysis and planning.
• Group 4 evaluated the impact on the Liquidity, Asset Management,
Long Term Solvency and Profitability measures for a range of options, then decided on the best strategic plan for ECY moving forward.
Question Yachts – Question 1
East Coast 1
Ratios Calculations
2012
Current Ratio
0.74
Quick Ratio
0.43
Case Study
Group 4
Julie Ciarlante
Mary Kathryn LoConte
Ivy Perez
David Zhu
East Coast Yachts Background
• ECY started in 2002 as a Limited Liability Company (LLC) with the mission of creating custom, high performance yachts for the pleasure sailor.
• A commitment to safety, reliability and customer satisfaction helped the company grow steadily for the first seven years in business.
• In 2009, the economic downturn and credit crunch hit the boat industry hard and kept the industry flat through 2010.
East Coast Yachts Today
• ECY was able to survive the most devastating years in the industry’s recent history. • In 2011 business started to pick up and by 2012 ECY was maximizing shareholder equity with some of the strongest ROE ratios in the industry.
• The Global Recreational Boating Industry Analysis and Forecast predicts that the industry will continue to grow over the next three years.
East Coast Yachts Industry Trends
• It is expected that the global boat market will go from $18.16 billion in
2010 to $27.8 billion in 2015 with a
Compounded Annual Growth Rate
(CAGR) of 8.9%.
• One of the specific boat building trends is an ongoing shift in product mix toward larger and more expensive boats.
• ECY is focused on being part of the industry growth and established strategic financial planning as an immediate goal.
Source NNMA 2012
East Coast Yachts Strategy
• To achieve this goal, Dan Ervin was hired to evaluate ECY’s financial performance and create short-term financial plans.
• The Financial Gurus from Group 4 were retained to assist with analysis and planning.
• Group 4 evaluated the impact on the Liquidity, Asset Management,
Long Term Solvency and Profitability measures for a range of options, then decided on the best strategic plan for ECY moving forward.
Question Yachts – Question 1
East Coast 1
Ratios Calculations
2012
Current Ratio
0.74
Quick Ratio
0.43