Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help! Thank you! Required information Problem 14-15 (Algo) Comprehensive Ratio Analysis (L014-2, L014-3, L014-4, L014-5, LO14-6) [The following information applies to the questions displayed

Please help! Thank you!
image text in transcribed
image text in transcribed
image text in transcribed
Required information Problem 14-15 (Algo) Comprehensive Ratio Analysis (L014-2, L014-3, L014-4, L014-5, 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: Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets Cash $ 1,050,000 5.1,290,000 Marketable securities 300,000 Accounts receivable, net 3,060,000 2,160,000 Inventory 3,400,000 2,400,000 Prepaid expenses 240,000 220,000 Total current assets 7,750,000 6,370,00 Plant and equipment, net 9,700, eee 9.140,000 Total assets $ 17,450,000 $ 15,510,000 Llabilities and Stockholders' Equity Liabilities: Current liabilities $ 4,400,000 $ 3, 160,000 Note payable, 10% 3,220,000 3,120,000 Total liabilities 8.120,000 6,280,000 Stockholders' equity Common stock, 370 par value 7,000,000 7,000,000 Retained earnings 2,330,000 2,230,000 Total stockholders' equity 9,330,000 9,230,000 Total llites and stockholders' equity 5.17,450,000 $ 15,510,000 1.ydex Company Comparative Income Statement and Reconciliation Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,950,000 $ 14,480,000 Cost of goods sold 12,760,000 10,860,000 Gross margin 3,190,000 3,620,000 Selling and administrative expenses 1,918, eee 1,640,000 Net operating income 1,272,eee 1,980,000 Interest expense 372,800 312.000 Net Income before taxes 900, een 1,668,000 Income taxes (30%) 270,000 500, 400 Net Income 630,000 1,167,600 Common dividends 530,000 583,800 Net Income retained 100,000 583,800 Beginning retained earnings 2,230,000 1,646, 280 Ending retained earnings $ 2,330,000 $ 2,230,000 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 32 days se days 8.7% 0.7 5.9 10 Problem 14-15 Part 2 (Algo) 2. You decide next to assess the company's stock market performance. Assume that Lydex's stock price at the end of this year is $112 per share and that at the end of last year it was $80. For both this year and last year, compute: (Round your "Percentage" answers to 1 decimal place and other intermediate and final answers to 2 decimal places.) a. The earnings per share b. The dividend yield ratio C. The dividend payout ratio d. The price-earnings ratio e The book value per share of common stock This Year Last Year a. The comings per share The dividend yield ratio The dividend payout ratio d. The price is ratio The book iu per share of common stock

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Information For Decision Making Readings In Cost And Managerial Accounting

Authors: Alfred Rappaport

3rd Edition

0134643542, 978-0134643540

More Books

Students also viewed these Accounting questions

Question

Why should an individual manager be interested in supporting HR?

Answered: 1 week ago