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 YearLast YearAssets Current assets: Cash$ 1,040,000$ 1,280,000Marketable securities0300,000Accounts receivable, net3,020,0002,120,000Inventory3,680,0002,300,000Prepaid expenses270,000210,000Total current assets8,010,0006,210,000Plant and equipment, net9,680,0009,130,000Total assets$ 17,690,000$ 15,340,000Liabilities and Stockholders' Equity Liabilities: Current liabilities$ 4,090,000$ 3,140,000Note payable, 10%3,720,0003,120,000Total liabilities7,810,0006,260,000Stockholders' equity: Common stock, $75 par value7,500,0007,500,000Retained earnings2,380,0001,580,000Total stockholders' equity9,880,0009,080,000Total liabilities and stockholders' equity$ 17,690,000$ 15,340,000

Lydex Company Comparative Income Statement and Reconciliation This YearLast YearSales (all on account)$ 15,940,000$ 14,380,000Cost of goods sold12,752,00010,785,000Gross margin3,188,0003,595,000Selling and administrative expenses1,216,0001,636,000Net operating income1,972,0001,959,000Interest expense372,000312,000Net income before taxes1,600,0001,647,000Income taxes (30%)480,000494,100Net income1,120,0001,152,900Common dividends320,000576,450Net income retained800,000576,450Beginning retained earnings1,580,0001,003,550Ending retained earnings$ 2,380,000$ 1,580,000

To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Companys industry:

Current ratio2.3 Acid-test ratio1.2 Average collection period32daysAverage sale period60daysReturn on assets8.6% Debt-to-equity ratio0.7 Times interest earned ratio5.8 Price-earnings ratio10

Problem 14-15 Part 2 (Algo)

2. You decide next to assess the companys stock market performance. Assume that Lydexs stock price at the end of this year is $110 per share and that at the end of last year it was $78. 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.