Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed below.] Lydex Company's financial statements for the last two years are as follows: Assets

image text in transcribed

Required information [The following information applies to the questions displayed below.] Lydex Company's financial statements for the last two years are as follows: Assets Current assets: Cash Marketable securities Lydex Company Comparative Balance Sheet This Year Last Year $ 890,000 $ 1,130,000 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% Total liabilities Stockholders' equity: Common stock, $70 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Lydex Company 2,420,000 3,530,000 240,000 7,080,000 9,380,000 $ 16,460,000 300,000 1,520,000 2,300,000 180,000 5,430,000 8,980,000 $ 14,410,000 $ 3,940,000 3,620,000 7,560,000 7,000,000 $ 2,840,000 3,020,000 5,860,000 7,000,000 1,900,000 1,550,000 8,900,000 8,550,000 $ 14,410,000 $ 16,460,000 Comparative Income Statement and Reconciliation Sales (all on account) Cost of goods sold This Year $ 15,790,000 12,632,000 3,158,000 1,796,000 Last Year $ 12,880,000 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 9,660,000 3,220,000 1,576,000 1,362,000 1,644,000 362,000 302,000 1,000,000 1,342,000 300,000 402,600 700,000 939,400 350,000 469,700 350,000 1,550,000 469,700 1,080,300 $ 1,550,000 $ 1,900,000 The following financial data and ratios are typical of companies in Lydex Company's industry: Current ratio Acid-test ratio 2.3 1.0 Average collection period 40 days Average sale period 60 days Return on assets 8.5% Debt-to-equity ratio 0.7 Times interest earned ratio 5.8 Price-earnings ratio 10 2. To assess the company's stock market performance, compute the following for this year and last year. Assume Lydex's stock price at the end of this year and last year was $80 and $48, respectively. Note: 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. 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 This Year % % Last Year % %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting for Governmental and Nonprofit Entities

Authors: Earl R. Wilson, Jacqueline L Reck, Susan C Kattelus

15th Edition

978-0256168723, 77388720, 256168725, 9780077388720, 978-007337960

More Books

Students also viewed these Accounting questions

Question

Why is globalization of industries a common factor today?

Answered: 1 week ago

Question

What do you think?

Answered: 1 week ago