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Problem 1 4 - 1 5 ( Algo ) Comprehensive Ratio Analysis [ LO 1 4 - 2 , LO 1 4 - 3 ,
Problem Algo Comprehensive Ratio Analysis LO LO LO LO LO
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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:
Problem Part Algo
Required:
You decide first to assess the company's performance in terms of debt management and profitability. Compute the following for both
this year and last year: Round your "Percentage" answers to decimal place and other answers to decimal places.
a The times interest earned ratio.
b The debttoequity ratio.
c The gross margin percentage.
d The return on total assets. Total assets at the beginning of last year were $
e The return on equity. Stockholders equity at the beginning of last year totaled $ There has been no change in common
stock over the last two years.
Is the company's financial leverage positive or negative?
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