Lydex Company Comparative Income Statement and Reconciliation This Year 15,900,000 $ 13,980,000 Last Year Sales (all on account) Cost of goods sold 12,720,000 10,485,000 Gross margin Selling and administrative expenses 3,180,000 1,410,000 3,495,000 1,620,000 Net operating income Interest expense 1,770,000 370,000 1,875,000 310,000 Net income before taxes Income taxes (30%) 1,400,000 420,000 1,565,000 469,500 Net income Common dividends 980,000 400,000 1,095,500 547,750 580,000 1,540,000 547,750 992,250 Net income retained Beginning retained earnings Ending retained earnings $ 2,120,000 $ 1,540,000 To begin your assigment 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 32 days 60 days 97 % 65 5.7 10