1. Present the balance sheet in common size
2. Present the income statement in common sise format through net income .
Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $70 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 945,000 0 2,900,000 3,650,000 270,000 7,765,000 9,620,000 $ 17,385,000 $ 1,250,000 300,000 2,000,000 2,000,000 210,000 5,760,000 9,100,000 $ 14,860,000 $ 4,070,000 3,700,000 7,770,000 $ 3,080,000 3,100,000 6,180,000 7,000,000 2,615,000 9,615,000 $ 17,385,000 7,000,000 1,680,000 8,680,000 $ 14,860,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,910,000 $ 14,080,000 Cost of goods sold 12,728,000 10,560,000 Gross margin 3,182,000 3,520,000 Selling and administrative expenses 1,019,143 1,624,000 Net operating income 2,162,857 1,896,000 Interest expense 370,000 310,000 Net income before taxes 1,792,857 1,586,000 Income taxes (30%) 537,857 475,800 Net income 1,255,000 1,110,200 Common dividends 320,000 555, 100 Net income retained 935,000 Beginning retained earnings 555, 100 1,680,000 1,124,900 Ending retained earnings $ 2,615,000 $ 1,680,000 To begin your assignment you gather the following financial data and ratios that are t- 2.3 1.2 Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price-earnings ratio 32 days 60 days 9.85 0.66 5.8 10 Common Size Balance Sheets This Year Last Year Assets Current assets: % 24.4% 0.0 0.0 0.0 24.4 0.0 % 24.4% Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Note payable, 10% Total liabilities Stockholders equity Common stock. $70 par value Retained earnings Total stockholders' equity Total liabilities and equity % % 00 0.0 0.0 0.0 0.0% 0.0% Lydex Company Common-Size Income Statements This Year Last Year % % +. Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income % %
