Required information 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 Comparative Balance Sheet This Year Last Year Assets Current assets 930,000 $1,170,000 300,000 Cash Harketable securities Accounts receivable, net Inventory Prepaid expenses 680,000 2,200,000 ,580,000 ,570,000 250 000 7,330,000 9.460,000 190,000- ,540,000 9,020,000 Total current assets Plant and equipment,net Total assets Liabilities and stockholders' Equity Liabilities 16,790,000 $14,560,00 Current 1iabilities Note payable, 10 3,980,000 $2,920,000 3,640,0003,040,000 960,000 7 620,000 Total 1sabilities Stockholders' equitys Conmon stock, $70 par valu Retained earnings ,000,000 2,170,000 170,000 1.500,000 8,600.000 Total stockholders' equity Total liabilities and stockholders equity $16,790,000 $14,560,000 Comparative Income Statement and Reconciliati This Year Last Year 15,830,000 $13,280,000 9,960,000 3,320,000 1,592,000 1,728,000 304,000 1,424,000 27,200 996,800 410,000498400 498,400 1,600,000 1,101,600 s 2,170,000 1,600,000 Sales (all on account) Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes 12,664,000 3,166,000 1,402,00 1,764,000 364,000 1,400,000 420,000 980,000 of 3 Income taxes (30%) Net income Conmon dividends Net income retained Beginning retained earnings Ending retained earnings 570,000 int To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry ences Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Tines interest earned ratio Price-earnings ratio 2.3 40 days 60 days 8.9 0.7 5-9 10 Required: 1. You decide first to assess the company's of debt m this year and last year: (Round your "Percentage" answers to 1 decimal place and other answers to performance in terms of debt management and profitability. Compute the following for both 2 decimal places.) Required: 1. 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 1 decimal place and other answers to 2 decimal places.) a. The times interest earned ratio. b. The debt-to-equity ratio. c. The gross margin percentage. d. The return on total assets. (Total assets at the beginning of last year were $13,040,000.) e. The return on equity, (Stockholders' equity at the beginning of last year totaled $8,101,600. There has been no change in common stock over the last two years.) f Is the company's financial leverage positive or negative? 11of 3 ts eBook Print erences This Year a. The times interest eamed ratio bThe debt-to-equity ratio 0.69 0.83 c. The gross margin percentage d. The retum on total assets 25.0 % 79% 8.81 % e. The return on equity 'lls the company's financial leverage posit ve or negative? bos tive me-... 2. You decide next to assess the company's stock market performance. Assume that Lydex's stock price at the end of this year is $88 per share and that at the end of last year it was $56. For both this year and last year, compute: (Round your "Percentage" answers to 1 decimal place and other intermediate and final answers to 2 decimal places.) a. The earnings per share. b. The dividend yield ratio. c. The dividend payout ratio. d. The price-earnings ratio. e. The book value per share of common stock Year Last Year a. The earnings per share b. The dividend yield ratio C. The dividend payout ratio d. The price-earnings ratio e. The book value per share of common stock Che 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and lest year, compute: a. Working capital. b. 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 recelvable at the beginning of last year totaled $1640,000.) (Use 365 days in a year Round your intermediate calculations and final answer to 2 decimal place.) e. The average sale period. (The inventory at the beginning of last year totaled $2,000,000,) (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal place.) .The operating cycle. (Round your intermediate calculations and final answer to 2 decimal place.) g. The total asset turnover. (The total assets at the beginning of last year totaled $14,580,000) (Round your final answers to 2 decimal places.) es a. Working capital b. The current ratio c The acid-tost ratio d. The average collection period e. The average sale period f. The operating cycle g. The total asset turnover days days days days days days