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: Assets Current assets: Lydex Company Comparative Balance Sheet This Year Last Year Cash Marketable securities 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 $ 1,110,000 300,000 1,440,000 2,100,000 180,000 $ 870,000 0 2,340,000 3,510,000 240,000 6,960,000 5,130,000 9,340,000 $16,300,000 $14,090,000 8,960,000 $ 3,920,000 $ 2,800,000 3,600,000 3,000,000 7,520,000 5,800,000 7,000,000 7,000,000 1,780,000 1,290,000 8,780,000 8,290,000 $16,300,000 $14,090,000 Lydex Company Comparative Income Statement and Reconciliation 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: This Year $ 15,770,000 12,616,000 3,154,000 Last Year $ 12,680,000 9,510,000 3,170,000 1,594,000 1,568,000 1,560,000 1,602,000 360,000 300,000 1,200,000 1,302,000 360,000 390,600 840,000 911,400 350,000 455,700 490,000 455,700 834,300 1,290,000 $ 1,80,000 $ 1,290,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio Average sale period Acid-test ratio Average collection period Return on assets Debt-to-equity ratio. Price-earnings ratio 2.3 1.0 30 days 60 days 8.38 0.7 Times interest earned ratio 5.9 10 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 $76 per share and that at the end of last year it was $44. 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. 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 $ 8.40 % % Last Year 9.11 % % 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and last 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 receivable at the beginning of last year totaled $1,580,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) e. The average sale period. (The inventory at the beginning of last year totaled $1,940,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) f. The operating cycle. (Round your intermediate calculations and final answers to 2 decimal place.) g. The total asset turnover. (The total assets at the beginning of last year totaled $12,980,000.) (Round your final answers to 2 decimal places.) a. Working capital This Year Last Year b. The current ratio c. The acid-test ratio d. The average collection period days days e. The average sale period days days f. The operating cycle days days g. The total asset turnover