ch 15 q.6

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 860,000 2,820,000 3,630,000 260,000 7,570,000 9,580,000 $ 17,150,000 $ 1,230,000 300,000 1,920,000 2,300,000 200,000 5,950,000 9,888,880 $15,230,000 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, 10% Total liabilities Stockholders' equity: Common stock, $70 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 4,550,000 3,680,000 8,230,089 $3,040,000 3,080,000 6,120,000 7,000,000 1,920,000 8,920,800 $ 17,150,000 7,000,000 1,910,000 8,910,000 $15,030,000 Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,890,800 Cost of goods sold 12,712,000 Gross margin 3,178,000 Selling and administrative expenses 2,124,286 Net operating income 1,053,714 Interest expense 368,000 Net income before taxes 685,714 Income taxes (30%) 285,714 Net income 480,000 Common dividends 478,000 Net income retained 10,000 Beginning retained earnings 1,910,000 Ending retained earnings S 1,920,000 L ast Year $ 13,880,000 10,410,000 3,478,000 1,616,880 1,854,000 308,000 1,546.000 463,800 1,082,200 541,100 541,199 1,368,900 $ 1,910,000 $ 4,550,000 3,680,000 8,230,000 $3,040,000 3,080,000 6,120,000 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 7,000,000 1,920,000 8,920,000 $ 17,150,000 7,000,000 1,910,000 8,910,000 $15,030,000 Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,890,000 Cost of goods sold 12,712,000 Gross margin 3,178,000 Selling and administrative expenses 2,124,286 Net operating income 1,053,714 Interest expense 368,000 Net income before taxes 685,714 Income taxes (30%) 205,714 Net income 480,000 Common dividends 470,000 Net income retained 10,000 Beginning retained earnings '1,910,000 Ending retained earnings $ 1,920,000 Last Year $13,880,000 10,410,000 3,470,000 1,616,000 1,854,000 308,000 1,546,000 463,800 1,282,200 541,100 541,100 1.368,900 5 1,910,000 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 2.4 1.2 32 days 60 days 9.6% 0.69 5.9 10 Required: 1. Present the balance sheet in common-size format 2. Present the income statement in common-size format down through net income. Prey 6 of 6 B Score answer > Price-earnings ratio 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 Lydex Company Common-Size Balance Sheets This 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, S70 par value Retained earnings Total stockholders' equity Total liabilities and equity 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 2.4 1.2 32 days 60 days 9.6% 0.69 5.9 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 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 %