Lydex Company$$s financial statements for the last two years are as follows:

Lydex Company

Comparative Balance Sheet

This Year Last Year

Assets

Current assets:

Cash $ $910,000$ $ $1,150,000$

Marketable securities $0300,000$

Accounts receivable, net $2,500,0001,600,000$

Inventory $3,550,0002,000,000$

Prepaid expenses $250,000190,000$

Total current assets $7,210,0005,240,000$

Plant and equipment, net $9,420,0009,000,000$

Total assets $ $16,630,000$ $ $14,240,000$

Liabilities and Stockholders' Equity

Liabilities:

Current liabilities $ $3,960,000$ $ $2,880,000$

Note payable, $10\%3,640,0003,040,000$

Total liabilities $7,600,0005,920,000$

Stockholders' equity:

Common stock, $$70$ par value $7,000,0007,000,000$

Retained earnings $2,030,0001,320,000$

Total stockholders' equity $9,030,0008,320,000$

Total liabilities and stockholders' equity $ $16,630,000$ $ $14,240,000$

Lydex Company

Comparative Income Statement and Reconciliation

This Year Last Year

Sales $($all on account$)$ $ $15,810,000$ $ $13,080,000$

Cost of goods sold $12,648,0009,810,000$

Gross margin $3,162,0003,270,000$

Selling and administrative expenses $1,298,0001,584,000$

Net operating income $1,864,0001,686,000$

Interest expense $364,000304,000$

Net income before taxes $1,500,0001,382,000$

Income taxes $(30\%)450,000414,600$

Net income $1,050,000967,400$

Common dividends $340,000483,700$

Net income retained $710,000483,700$

Beginning retained earnings $1,320,000836,300$

Ending retained earnings $ $2,030,000$ $ $1,320,000$

The following financial data and ratios are typical of companies in Lydex Company$$s industry:

Current ratio $2\mathrm{.}3$

Acid$-$test ratio $1\mathrm{.}0$

Average collection period $40$ days

Average sale period $60$ days

Return on assets $8\mathrm{.}7\%$

Debt$-$to$-$equity ratio $0\mathrm{.}7$

Times interest earned ratio $5\mathrm{.}7$

Price$-$earnings ratio $10$

$3.$ To assess the company$$s liquidity and asset management, compute the following for this year and last year:

Working capital.

The current ratio.

Note: Round your final answers to $2$ decimal places.

The acid$-$test ratio.

Note: Round your final answers to $2$ decimal places.

The average collection period. $($The accounts receivable at the beginning of last year totaled $$1,620,000.)$

Note: Use $365$ days in a year. Round your intermediate calculations and final answers to $2$ decimal place.

The average sale period. $($The inventory at the beginning of last year totaled $$1,980,000.)$

Note: Use $365$ days in a year. Round your intermediate calculations and final answers to $2$ decimal place.

The operating cycle.

Note: Round your intermediate calculations and final answers to $2$ decimal place.

The total asset turnover. $($The total assets at the beginning of last year totaled $$13,020,000.)$

Note: Round your final answers to $2$ decimal places.