Problem 14-15 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: Lydex Company Assets Current assets: Cash Comparative Balance Sheet, This Year Last Year $ 900,000 2,460,000 3,540,000 $ 1,140,000 300,000 1,560,000 2,400,000 250,000 190,000 7,150,000 5,590,000 9,400,000 8,990,000 $16,550,000 $14,580,000 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, 10% Common stock, $75 par value Total liabilities Stockholders' equity: Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Lydex Company $ 3,950,000 3,620,000 $ 2,860,000 3,020,000 7,570,000 5,880,000 7,500,000 7,500,000 1,480,000 1,200,000 8,980,000 8,700,000 $16,550,000 $14,580,000 Comparative Income Statement and Reconciliation This Year Last Year $15,800,000 $12,980,000 Sales (all on account) Cost of goods sold 12,640,000 9,735,000 Gross margin 3,160,000 3,245,000 Selling and administrative expenses 1,998,000 1,580,000 Net operating income 1,162,000 1,665.000 Interest expense 362,000 302,000 Net income before taxes 800,000 1,363,000 Income taxes (30%) 240,000 408,900 Net income 560,000 954,100 Common dividends) 280,000 477,050 Net income retained 280,000 477,850 1,200,000 722,950 $ 1,480,000 $1,200,000 Beginning retained earnings. Ending retained earnings To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: