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: Cash Lydex Company Comparative Balance Sheet This Year Last Year $ 890,000 $ 1,020,000 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 Lydex Company 2,420,000 3,530,000 240,000 7,080,000 9,380,000 300,000 1,520,000 2,300,000 180,000 5,320,000 8,980,000 $ 16,460,000 $ 14,300,000 $ 3,960,000 $ 2,860,000 3,620,000 3,020,000 7,580,000 5,880,000 7,000,000 7,000,000 1,880,000 1,420,000 8,880,000 8,420,000 $ 16,460,000 $ 14,300,000 Comparative Income Statement and Reconciliation, Sales (all on account) Cost of goods sold This Year $ 15,790,000 12,632,000 3,158,000 Last Year $ 12,880,000 9,660,000 3,220,000 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 Ending retained earnings Beginning retained earnings 1,638,857 1,576,000 1,519,143 1,644,000 362,000 302,000 1,157,143. 1,342,000 347,143 402,600 810,000 939,400 350,000 469,700 460,000 469,700 1,420,000 $ 1,880,000 950,300 $ 1,420,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: enging retained earnings 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 Required: 2.3 1.2 40 days 60 days 8.5% 0.69 5.8 10 1. Present the balance sheet in common-size format. 2. Present the income statement in common-size format down through net income. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Present the balance sheet in common-size format. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column.) Lydex Company Common-Size Balance Sheets 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: This Year Last Year % 0.0 0.0 0.0 % 0.0 % 0.0 % 0.0 % Required: 1. Present the balance sheet in common-size format. 2. Present the income statement in common-size format down through net income. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Present the balance sheet in common-size format. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column.) Assets Current assets: Cash Lydex Company Common-Size Balance Sheets Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: This Year Last Year % % 0.0 0.0 0.0 % 0.0 % Current liabilities % % Note payable, 10% Total liabilities 0.0 0.0 Stockholders' equity Common stock, $70 par value Retained earnings Total stockholders' equity 0.0 0.0 Total liabilities and equity 0.0 % 0.0 % 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 Return on assets 2.3 1.2 40 days 60 days Average sale period 8.5% Debt-to-equity ratio 0.69 Times interest earned ratio 5.8 Price-earnings ratio 10 Required: 1. Present the balance sheet in common-size format. 2. Present the income statement in common-size format down through net income. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Present the income statement in common-size format down through net income. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column.) Sales Cost of goods sold Lydex Company Common-Size Income Statements This Year Last Year % % Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income % %