Accounting balance sheet questions
You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company's financial statements, including comparing Lydex's performance to its major competitors. The company's financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet This Year Last Year 960,000 0 2,700,000 3,900,000 240,000 7,800,000 9,300,000 $17,100,000 $ 1,260,000 300,000 1,800,000 2,400,000 180,000 5,940,000 8,940,000 $14,880,000 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, 100 Total liabilities Stockholders' equity: Common stock, 578 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 3,900,000 3,600,000 7.500,000 $2,760,000 3,000,000 5,760,000 7,800,000 1,800,000 9,600,000 $17,100,000 7,800,000 1,320,000 9,120,000 $14,880,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,750,000 $ 12,480,000 Cost of goods sold 12,600,000 9,900,000 Gross margin 3,150,000 2,580,000 Selling and administrative expenses 1,590,000 1,560,000 Net operating income 1,560,000 1,020,000 Interest expense 360,000 300,000 Net income before taxes 1,200,000 720,000 Income taxes (308) 360,000 216,000 Net income 840,000 504,000 Common dividends 360,000 252,000 Net income retained 480,000 252,000 Beginning retained earnings 1,320,000 1,068,000 Ending retained earnings $ 1,800,000 $ 1,320,000 ences To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: 2.3 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 1.2 30 days 60 days 9.5% 0.65 5.7 10 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: 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 2.3 1.2 30 days 60 days 9.58 0.65 5.7 10 Required: 1. Present the balance sheet in common-size format. 2. Present the income statement in common-size format down through net income. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Present the balance sheet in common-size format. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column.) Last Year 0.0 Common-Size Balance Sheets This Year Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets 0.0 Plant and equipment, net Total assets 0.0 % Liabilities and Stockholders' Equity Liabilities: Current liabilities % Note payable, 10% Total liabilities 0.0 Stockholders' equity: Common stock, $78 par value Retained earnings Total stockholders' equity 0.0 Total liabilities and equity 0.0 % 0.0% 0.0 0.0 0.0 % Present the income statement in common-size format down through net income. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column. 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
