Ch14 HW Seved 3 Part 3 of 3 3.34 ponta Required information. [The following information applies to the questions displayed below] 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: Assets ebook Current assets: P 10 References Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Lydex Company Comparative Balance Sheet This Year Last Year $940,000 0 2,620,000 3,580,000 250,000 Liabilities and Stockholders' Equity Liabilities: Current Liabilities Note payable, 10% Total liabilities Stockholders' equity: Conson stock, $75 par value 7,390,000 9,480,000 $ 16,870,000 $ 1,180,000 300,000 1,720,000 2,300,000 190,000 5,690,000 9,030,000 $14,720,000 $ 2,940,000 3,060,000 6,000,000 $ 3,990,000 3,660,000 7,650,000 7,500,000 7,500,000 Retained earnings 1,720,000 1,220,000 Total stockholders' equity i 9,220,000 8,720,000 Total Liabilities and stockholders' equity $ 16,870,000 $14,720,000 Lydex Company Comparative Income Statement and Reconciliation This Year Help Part 33 Total stockholders' equity Total liabilities and stockholders' equity Lydex Company 9,220,000 $ 16,870,000 Comparative Income Statement and Reconciliation Sales (all on account) Cost of goods sold Gross margin 334 points Selling and administrative expenses Net operating income Interest expense This Year $ 15,840,000 12,672,000 3,168,000 1,602,000 1,566,000 8,720,000 $14,720,000 Last Year $ 13,380,000 10,035,000 3,345,000 5,000 1,749,000 365,000 Net income before taxes: Income taxes (389) Net income Common dividends Net incose retained Pine References Beginning retained earnings Ending retained earnings 1,200,000 040,000 340,000 306,000 1,443,000 1,010,100 ses, ese 500,000 ses,ese 1,220,000 714,950 $ 1,220,000 $1,720,000 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 sale period Return on assets Average collection period Debt-to-equity ratio Tines interest earned ratio Price-earnings ratio 2.4 1.1 40 days 60 days 9.1% 0.7 5.7 10 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and last year, compute a. Working capital, b. The current ratio. (Round your final answers to 2 decimal places.) c. The acid-test ratio. (Round your final answers to 2 decimal places.) d. The average collection period. (The accounts receivable at the beginning of last year totaled $1,650,000) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) e. The average sale period. (The inventory at the beginning of last year totaled $2,010,000) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place) Part 3 of 3 Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio 2.4 1.1 40 days 60 days 9.1% 0.7 Times interest earned ratio Price-earnings ratio 5.7 334 points look 10 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and last year, compute: a. Working capital. b. The current ratio. (Round your final answers to 2 decimal places.) c. The acid-test ratio. (Round your final answers to 2 decimal places.) d. The average collection period. (The accounts receivable at the beginning of last year totaled $1,650,000) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) References e. The average sale period. (The inventory at the beginning of last intermediate calculations and final answers to 2 decimal place.) year totaled $2,010,000) (Use 365 days in a year. Round your f. The operating cycle. (Round your intermediate calculations and final answers to 2 decimal place.) g. The total asset turnover. (The total assets at the beginning of last year totaled $13,050,000) (Round your final answers to 2 decimal places.) Working capital This Year Last Year The current ratio The acid-test ra d. The average collection period days days e. The average sale period days days The operating cycle days days g. The total asset turnover