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 $ 1,050,000 3,868, eee 3,400,000 240,000 7,750,000 9,700,000 $ 17,450,000 $ 1,368,eee 380,eee 2,168, eee 2,480,eee 220,000 6, 440, een 9, 140, eee $ 15,588,eee 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, 18% Total liabilities Stockholders' equity: Connon stock, 578 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 4,400.eee 3,720,000 8,120,000 $ 3,168,000 3, 120, eee 6,288,888 7,eee, eee 2,338,eee 9, 338,eee $ 17,450,000 7,682,eee 2,300,000 9,388, eee $ 15,580,000 Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,958,888 Cost of goods sold 12,760,089 Gross margin 3,190,000 Selling and administrative expenses 2,218.000 Net operating income 1,172,000 Interest expense 372,880 Net income before taxes 888,888 Income taxes (30%) 248,888 Net income 568,888 Connon dividends 538,888 Net income retained 30,00 Beginning retained earnings 2,388,888 Ending retained earnings $ 2,330,000 Last Year $ 14,482.ee 18,860,000 3.620.000 1,648,eee 1,980,000 312,600 1,668,eee 500,400 1,167,600 583, see 583,800 1,716, 2ee $ 2,3ee,eee To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's Industry: 60 days Current ratio 2.3 Acid-test ratio 1.2 Average collection period 32 days Average sale period Return on assets 8.7% Debt-to-equity ratio 2.65 Times interest earned ratio 5.9 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 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 This Year Last Year Assets % % 0.0 0.0 0.01% 0.01% 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 Common stock, 570 par value Retained earnings Total stockholders' equity Total liabilities and equity % 0.01 0.0 0.0 0.0% 0.0 0.01% Required 1 Required 2 > 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.) Lydex Company Common-Size Income Statements This Year Last Year Sales % % Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income %