Help with the incorrect answer in red. I have also tried inputting 128.7 days but it is also incorrect. Please help, thank you.
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, 10% Total liabilities Stockholders' equity: Common stock, $78 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 Sales (all on account) $ 15,750,000 Cost of goods sold 12,600,000 Gross margin 3,150,000 Selling and administrative expenses 1,590,000 Net operating income 1,560,000 Interest expense 360,000 Net income before taxes 1,200,000 Income taxes (30%) 360,000 Net income 840,000 Common dividends 360,000 Net income retained 480,000 Beginning retained earnings 1,320,000 Ending retained earnings $ 1,800,000 Last Year $ 12,480,000 9,900,000 2,580,000 1,560,000 1,020,000 300,000 720,000 216,000 504,000 252,000 252,000 1,068,000 $ 1,320,000 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 1.2 30 days 60 days 9.5% 0.65 5.7 10 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and last year, compute: year. Round 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 $1,560,000.) (Use 365 days in a your intermediate calculations and final answers to 1 decimal place.) e. The average sale period. (The inventory at the beginning of last year totaled $1,920,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 1 decimal place.) f. The operating cycle. (Round your intermediate calculations and final answers to 1 decimal place.) g. The total asset turnover. (The total assets at the beginning of last year totaled $12,960,000.) (Round your final answers to 2 decimal places.) X Answer is complete but not entirely correct. This Year Last Year 3,900,000 3,180,000 a. Working capital b. The current ratio 2.00 2.15 c. The acid-test ratio 0.94 1.22 52.1 days 91.3 d. The average collection period e. The average sale period f. The operating cycle g. The total asset turnover days days 49.3 days 79.6 days 128.9 X days 143.4 0.98 0.90
