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This Year 8 You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you

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This Year 8 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 Last Year Assets Current assets: Cash $ 1,000,000 $ 1,240,000 Marketable securities 300,000 Accounts receivable, net 2,860,000 1,960,000 Inventory 3,640,000 2,400,000 Prepaid expenses 270,000 210,000 Total current assets 7,770,000 6,110,000 Plant and equipment, net 9,600,000 9,090,000 Total assets $ 17,370,000 $ 15,200,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 4,050,000 $ 3,060,000 Note payable, 10% 3,700,000 3,100,000 Total liabilities 7,750,000 6,160,000 Stockholders' equity: Common stock, $75 par value 7,500,000 7,500,000 Retained earnings 2,120,000 1,540,000 Total stockholders' equity 9,620,000 9,040,000 Total liabilities and stockholders' equity $ 17,370,000 $ 15,200,000 Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,900,000 Cost of goods sold 12,720,000 Gross margin 3,180,000 Selling and administrative expenses 1,410,000 Net operating income 1,770,000 Interest expense 370,000 Net income before taxes 1,400,000 Income taxes (30%) 420,000 Net income 980,000 Common dividends 400,000 Net income retained 580,000 Beginning retained earnings 1,540,000 Ending retained earnings $ 2,120,000 Last Year $ 13,980,000 10,485,000 3,495,000 1,620,000 1,875,000 310,000 1,565,000 469,500 1,095,500 547,750 547,750 992,250 $ 1,540,000 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 1.1 32 days 60 days 9.7% 0.7 5.7 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 $102 per share and that at the end of last year it was $70. 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. This Year Last Year % % % % 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

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