Part 3 of 3 7 Do Required information Problem 14-15 (Algo) Comprehensive Ratio Analysis (LO14-2, LO14-3, LO14-4, LO14-5, LO14-6) [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: ebook Assets References Current assets Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Lydes Company Comparative Balance Sheet This Year Last Year $900,000 $1,140,000 300,000 2,460,000 3,540,000 250,000 1,560,000 2,400,000 190,000 Liabilities and Stockholders' Equity Liabilities Current Habilities Note payable, 10x Total liabilities Stockholders equity Common stock, $7% par value Retained earnings Total stockholders' equity total liabilities and stockholders equity 7,150,000 9,400,000 $ 16,550,000 $3,950,000 3,620,000 5,550,000 950,000 $14,500,000 13,860,000 3,020,00 7570,000 $800,000 7,500,000 7,500,000 3,200,000 5,580,000 700,000 $1,550,000 $14,500,000 Part 3 of 3 Lydex Company Comparative Income Statement and Reconciliation Sales (all on account) Cost of goods sold Gross margin This Year $ 15,800,000 12,640,000 3,160,000 1,998,000 Last Year $ 12,950,000 9,735,000 3,245,000 7 points eBook References Selling and administrative expenses Net operating Income Interest expense Net income before taxes: Income taxes (30%) Net income Common dividends Net income retained Beginning retained earnings Ending retained earnings 1,580,000 1,162,000 1,665,000 362,000 107,000 800,000 1,163,000 240,000 408,900 560,000 954,100 200,000 477,050 200,000 477,050 722,950 1,200,000 $1,480,000 $ 1,200,000 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 Problem 14-15 Part 3 (Algo) 2.3 1.0 40 days 60 days 9.7 5.9 10 Part 3 of 3 7 points ebook References Problem 14-15 Part 3 (Algo) 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 $1,610,000) (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 $1.970,000) (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.) g. The total asset turnover. (The total assets at the beginning of last year totaled $13,010,000) (Round your final answers to 2 decimal places.) a Working capital This Year Last Year b The cunent ratio The sod test ratio d. The average colection period days days e The average sale penod days days The operating cycle days days The total asset turnover