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please help with all parts, thanks! You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss
please help with all parts, thanks!
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 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, 105 Total liabilities Stockholders' equity: Common stock, $75 par value Retained earningo Total stockholders' equity Total liabilities and stockholders' equity $ 880,000 0 2,380,000 3,520,000 240,000 7,020,000 9,360,000 $16,380,000 $ 1,120,000 300,000 1,480,000 2,200,000 180,000 5,280,000 8,970,000 $14,250,000 $ 3,930,000 3,620,000 7,550,000 $ 2,820,000 3,020,000 5,840,000 7,500,000 1,330,000 8.830,000 $16,380,000 7,500,000 910,000 8.410.000 $14,250,000 1.ydex Company Comparative Income Statement and Reconciliation This Year Last Year Salen (all on account) $ 15,780,000 $12,780,000 Coat of goods sold 12,624,000 9,585,000 Gross margin 3,156,000 3,195,000 Selling and administrative expenses 1,794,000 1,572,000 Het operating income 1,362,000 1,623,000 Interest expense 362,000 302,000 Net Income before taxes 1,000,000 1,321,000 Income taxes (30) 300,000 396,300 Net Income 700,000 924,700 Common dividends 280.000 462,350 Net Income retained 420,000 462,350 Beginning retained earnings 910,000 442.650 Ending retained earningo $ 1,330,000 $ 910,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's Industry: 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 1.0 30 days 60 days 8.40 0.7 5.7 10 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and last year, compute: a. Working capital 6. 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 $1,590,000.) (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 $1,950,000.) (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.) 9. The total asset turnover. (The total assets at the beginning of last year totaled $12,990,000.) (Round your final answers to 2 decimal places.) This Year Last Year 2. Working capital b. The current ratio c. The acid-test ratio d. The average collection period 6. The average sale period The operating cycle 9. The total asset turnover days days days days days days Step by Step Solution
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