Required information [The fol/owing information applies to the questions displayed below] You havejust been hired as a financial analyst for Lydex Company, a manufacturer of safety helmetsl 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: Cash $ 890,000 $ 1,130,000 Marketable securities 0 300,000 Accounts receivable, net 2,420,000 1,520,000 Inventory 3,530,000 2,300,000 Prepaid expenses 240,000 180,000 Total current assets 7,080,000 5,430,000 Plant and equipment, net 9,380,000 8,980,000 Total assets $ 15,450,000 $ 14,410,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 3,940,000 $ 2,840,000 Note payable, 10% 3,620,000 3,020,000 Total liabilities 7,560,000 5,860,000 Stockholders' equity: Common stock, $70 par value 7,000,000 7,000,000 Retained earnings 1,900,000 1,550,000 Total stockholders' equity 8,900,000 8,550,000 Total liabilities and stockholders' equity $ 15.450.030 $ 14,410,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,790,000 $ 12,880,000 Cost of goods sold 12,632,000 9,660,000 IULdL bLULKllULUCIb EqULLy 0,300,000 O,JJU,UUU Total liabilities and stockholders' equity $ 15.450.099 $ 14,410,900 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,790,000 $ 12,880,000 Cost of goods sold 12,632,000 9,660,000 Gross margin 3,158,000 3,220,000 Selling and administrative expenses 1,796,000 1,576,000 Net operating income 1,362,000 1,644,000 Interest expense 362,000 302,000 Net income before taxes 1,000,000 1,342,000 Income taxes (30%) 300,000 402,600 Net income 700,000 939,400 Common dividends 350,000 469,700 Net income retained 350,000 469,700 Beginning retained earnings 1,550,000 1,080,300 Ending retained earnings $ 1.900.009 $ 1.550.900 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio 2.3 Acidtest ratio 1.0 Average collection period 40 days Average sale period 60 days Return on assets 8.5% Debttoequity ratio 0.7 Times interest earned ratio 5.8 Priceearnings ratio 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 $80 per share and that at the end of last year it was $48. 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. Debttoequity ratio Times interest earned ratio Priceearnings ratio U'IG Il- . GOSH 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 $80 per share and that at the end of last year it was $48. 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 priceearnings ratio. e. The book value per share of common stock. c. The dividend payout ratio d. The price-earnings ratio e. The book value per share of common stock 3. You decide, nally, 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 $1,600,000.) (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 $1,960,000.) (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.) 9. The total asset turnover. (The total assets at the beginning of last year totaled $13,000,000.) (Round your final answers to 2 decimal places.) a. Working capital b. The current ratio c. The acid-test ratio d. The average collection period e. The average sale period f. The operating cycle g. The total asset turnover