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 companys financial statements, including comparing Lydexs performance to its major competitors. The companys 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 $ 860,000 $1,100,000 300,000 1,400,000 2,000,000 180,000 0 2,300,000 3,500,000 240,000 Total current assets Plant and equipment, net 6,900,000 9,320,000 4,980,000 8,950,000 Total assets $16,220,000 $ 13,930,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% $ 3,910,000 $ 2,780,000 3,000,000 3,600,000 Total liabilities 7,510,000 5,780,000 Stockholders' equity: Common stock, $75 par value Retained earnings 7,500,000 1,210,000 7,500,000 650,000 Total stockholders' equity 8,710,000 8,150,000 Total liabilities and stockholders' equity $16,220,000 $ 13,930,000