[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: 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: Retained earnings Total stockholders' equity $ 900,000 2,460,000 3,540,000 250,000 7,150,000 9,400,000 $ 16,550,000 $ 3,950,000 3,620,000 7,570,000 7,500,000 1,480,000 8,980,000 $ 16,550,000 $ 1,140,000 300,000 1,560,000 2,400,000 190,000 5,590,000 8,990,000 $ 14,580,000 $ 2,860,000 3,020,000 5,880,000 7,500,000 1,200,000 8,700,000 $ 14,580,000 Common stock, $75 par value Total liabilities and stockholders' equity Lydex Company Comparative Income Statement and Reconciliation Sales (all on account) This Year $ 15,800,000 12,640,000 3,160,000 1,998,000 Last Year $ 12,980,000 9,735,000 3,245,000 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 To begin vnur acsinnma 1,162,000 1,580,000 1,665,000 362,000 302,000 800,000 1,363,000 240,000 408,900 560,000 954,100 280,000 477,050 477,050 722,950 280,000 1,200,000 $ 1,480,000 $ 1,200,000