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 $ 1,020,000 2,949, 280 3,660,80 278,000 7,890,000 9,649, eee $ 17,530,000 $ 1,260,eee 300,000 2,848, eee 2,180, eee 218, eee 5,919,80 9, 110, eee $ 15,020, cee 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: Common stock, $75 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 4,079,80 3,788, eee 7,779, eee $ 3,100,eee 3,188, eee 6, 200, eee 7,589, eee 2,260, eee 9,760, eee $ 17,530,000 7,580, eee 1,320, eee 8,820, eee $ 15,020, eee Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,929, eee Cost of goods sold 12,736, eee Gross margin 3,184, eee Selling and administrative expenses 1,014,200 Net operating income 2,178, eee Interest expense 370, eee Net income before taxes 1,800, eee Income taxes (30%) 540,000 Net income 1,260, eee Common dividends 329, eee Net income retained 948, eee Beginning retained earnings 1,320, eee Ending retained earnings $ 2,260,000 Last Year $ 14,188,888 18,635, eee 3,545, 680 1,628, eee 1,917, eee 318,eee 1,607,080 482, 180 1,124,980 562,450 562,450 757, 550 $ 1,320,080 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's Industry 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 2.3 1.1 32 days 60 days 9.9% 0.7 5.9 18 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and last year, compute: a. Working capital. b. The current ratio. (Round your final answers to 2 decimal places.) c. The acid-test ratio. (Round your final answers to 2 decimal places.) d. The average collection period. (The accounts recelvable at the beginning of last year totaled $1,730,000.) (Use 365 days in a year. Round your Intermediate calculations and final answer to 2 decimal place.) e. The average sale period. (The Inventory at the beginning of last year totaled $2,090,000.) (Use 365 days in a year. Round your Intermediate calculations and final answer to 2 decimal place.) f. The operating cycle. (Round your intermediate calculations and final answer to 2 decimal place.) 9. The total asset turnover. (The total assets at the beginning of last year totaled $13,130,000.) (Round your final answers to 2 decimal places.) This Year Last Year a. Working capital b. The current ratio c. The acid-test ratio d. The average collection period e. The average sale period f. The operating cycle 9. The total asset turnover days days days days days days