You have j ust 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 $ 960,000 Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses 2,700,000 3,900,000 240,000 1,260,000 300,000 1,800,000 2,400,000 180,000 Total current assets Plant and equipment, net 7,800,000 9,300,000 5,940,000 8,940,000 Total assets $17,100,000 $14,880,000 Liabilities and Stockholders' Equity Liabilities Current liabilities Note payable, 10% $ 3,900,000 3,600,000 2,760,000 3,000,000 Total liabilities 7,500,000 5,760,000 Stockholders' equity Common stock, $78 par value Retained earnings 7,800,000 7,800,000 1,800,000 1,320,000 9,120,000 $17,100,000 $14,880,000 Total stockholders' equity 9,600,000 Total liabilities and stockholders' equity Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) Cost of goods sold $15,750,000 12,480,000 9,900,000 12,600,000 Gross margin 3,150,000 2,580,000