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 a you to perform a comprehensive analysis of the to its major competitors. The company's financial statements for the last two years are as company's financial statements, including comparing Lydex's performance Lydex Company Comparative Balance Sheet Assets Current assetst Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses 890,000 1,130,000 300,000 1,520,000 3,530,000 2,300,000 180,000 5,430,000 9.380,000 .980,000 2,420,000 240,000 7,080,000 Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: $16,460,000 $14,410,00 Current liabilities Note payable, 10 3,940,000 2,840,000 5,860,000 7,000,000 3,620,000 Total liabilities Stockholders' equity: Common stock, $70 par value Retained earnings 7,000,000 1,900,000 8,900,000 1,550,000 8,550,000 Total stockholders' equity Total liabilities and stockholders equity $16,460, 000 $14,410,000 Lydex Company Comparative Income Statement and Reconciliation This Year 15,790,000 $12,880,000 Sales (all on account) Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income Common dividends Net income retained Beginning retained earnings Ending retained earnings st Year 12,632,000 3,158,000 1,796,000 1,362,000 362,000 1,000,000 9,660,000 3,220,000 1,576,000 1,644,000 302,000 1,342,000 300,000402,600 939,400 700,000 350,000 350,000 1,550,000 469,700- 469,700 1,080,300 $ 1,900,000 1,550,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price-earnings ratio 2.3 1.0 40 days 60 days 8.5% 0.7 10 d The return on totalassets. (Total assets at the beginning of last year were $13,000,000) d. The return on total assets | 6.9 Ol%| 4.50%