Problem 16-16 (Algo) Common-Size Financial Statements [LO16-1] 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: Assets Current assets: Cash Marketable securities. Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Lydex Company Comparative Balance Sheet This Year Last Year $900,000 $1,030,000 0 300,000 2,460,000 Liabilities and Stockholders' Equity Liabilities: Current Liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $75 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Lydex Company 3,540,000 250,000 7,150,000 9,400,000 1,560,000 2,400,000 190,000 5,480,000 8,990,000 $ 16,550,000 $ 14,470,000 $ 3,950,000 $ 2,860,000 3,620,000 7,570,000 7,500,000 1,480,000 8,980,000 3,020,000 5,880,000 7,500,000 1,090,000 8,590,000 $ 16,550,000 $ 14,470,000 Comparative Income Statement and Reconciliation Sales (all on account) This Year Last Year $ 15,800,000 $ 12,980,000 Cost of goods sold Gross margin Selling and administrative expenses Net operating incone Interest expense Net incone before taxes- Income taxes (305) Net income 12,640,000 9,735,000 3,160,000 3,245,000 1,840,857 1,580,000 1,319,143 1,665,000 362,000 302,000 957,143 1,363,000 287,143 488,900 678.600 954 108