Check my 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 $1,570,000) (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 $1,930,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) f. The operating cycle (Round your intermediate calculations and final answers to 2 decimal place.) 9. The total asset turnover. (The total assets at the beginning of last year totaled $12.970,000.) (Round your final answers to 2 decimal places.) This Year Last Year a Working capital b. The current ratio The acid-test ratio d. The average collection period e The average sale period The operating cycle The total asset turnover days days days days days 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, $75 par value Retained earnings Total stockholders' equity Total llabilities and stockholders' equity 860,000 0 2,300,000 3,500,000 240,000 6,900,000 9,320,000 $ 16,220,000 $ 1,100,000 300,000 1,400,000 2,000,000 180,000 4,980,000 8,950,000 $ 13,930,000 $ 3,910,000 3,600,000 7,510,000 $ 2,780,000 3,000,000 5,780,000 7,500,000 1,210,000 8,710, eee $ 16,220,000 7,500,000 650,000 8,150.000 $ 13,930,000 Lydex Company Comparative Income Statement and Reconciliation This Year Soles (all on account) $15.760,000 Cost of goods sold 12,608,000 Gross margin 3,152,000 Selling and administrative expenses 1.592,000 tlet operating income 1,560,000 Last Year $ 12,580,000 9,435,000 3,145,000 1,564,800 1,581,000 "Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,760,000 $ 12,580,000 Cost of goods sold 12,608,080 9,435,000 Gross margin 3,152,000 3,145,000 Selling and administrative expenses 1,592,000 1,564,000 Net operating income 1,560,000 1,581,000 Interest expense 360,000 300.000 Net income before taxes 1,200,000 1,281,000 Income taxes (30%) 360,000 384,300 Net Income 840,000 896,700 Common dividends 280,000 448, 350 Net income retained 560,000 Beginning retained earnings 448,350 650,000 201,650 Ending retained earnings $ 1,210,000 $ 650,000 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 2.3 1.0 30 days 60 days 8.2% 0.7 5.8 10
