Problem 14-16 (Algo) Common-Size Financial Statements (L014-1) 0 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 $1,020,000 $ 1,320,000 Marketable securities Accounts receivable, net 300,000 2,940,000 Inventory 2,040,000 3,668,000 2,100,000 Prepaid expenses 270.000 Total current assets 210,000 7,890,000 5,970.00 Plant and equipment, net 9,640,000 9,110,000 Total assets $ 17,530,000 $ 15,080,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 4,070,000 5.2,450, ce Hote payable, 10% 3,700,000 3.100.000 Total liabilities 7.720,000 5.550.000 Stockholders' equity Common stock, $75 par value 7,500,000 7,500,000 Hetained earnings 2,260,000 2,030,000 Total stockholders' equity 9,760.000 9.510,000 Total liabilities and stockholders' equity $17.530,000 $ 15,000,000 Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,920,000 Cost of goods sold 12,736,000 Gross margin 3,184,000 Selling and administrative expenses 2.028,286 Net operating income 1,155,714 Interest expense 370,000 Net income before taxes 785,714 Income taxes (30%) 285,714 Net income 550.000 Common dividends 320,000 Net Incone retained 230,000 Beginning retained earnings 2.030,000 Ending retained earnings 5.2, 260,000 Last Year $ 14,180,000 10,635,000 3,545,000 1,628,000 1,917,000 310.000 1,607,000 482, 100 1,124,900 562,450 562,450 1,467,550 $ 2,030,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in tydex Company's Industry: Current ratio 2.3 Acid-test ratio 1.2 Average collection period 32 days Average sale period 60 days Return on assets 9.98 Debt-to-equity ratio Times Interest earned ratio 5. Price camins ratio 10 Required: 1. Present the balance sheet in common size format. 2. Present the income statement in common size format down through net income. Complete this question by entering your answers in the tabs below. Present the balance sheet in common size format. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column.) Last Year 00 Lydex Company Common-Size Balance Sheets This Year Assets Current assets Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets 00 Plant and equipment, net Total assets 0.0 Liabilities and Stockholders' Equity Liabilities Current liabilities Note payable 10% Total liabilities 00 Stockholders equity Common stock, S75 par value Retained oorings Total stockholders' equity 00 Total liabilities and equity 00% 0:09 00 00 00% Required 1 Required 2 Present the income statement in common-size format down through net income. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column) Lydex Company Common-Size Income Statements This Year Last Year Sales % Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income %