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 CompanyComparative Balance SheetThis YearLast Year Assets Current assets: Cash$820,000 $1,060,000 Marketable securities0 300,000 Accounts receivable, net2,860,000 1,960,000 Inventory3,640,000 2,400,000 Prepaid expenses270,000 210,000 Total current assets7,590,000 5,930,000 Plant and equipment, net9,600,000 9,090,000 Total assets$17,190,000 $15,020,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities$4,050,000 $3,060,000 Note payable, 10%3,700,000 3,100,000 Total liabilities7,750,000 6,160,000 Stockholders' equity: Common stock, $75 par value7,500,000 7,500,000 Retained earnings1,940,000 1,360,000 Total stockholders' equity9,440,000 8,860,000 Total liabilities and stockholders' equity$17,190,000 $15,020,000 Lydex CompanyComparative Income Statement and ReconciliationThis YearLast Year Sales (all on account)$15,900,000 $13,980,000 Cost of goods sold12,720,000 10,485,000 Gross margin3,180,000 3,495,000 Selling and administrative expenses1,410,000 1,620,000 Net operating income1,770,000 1,875,000 Interest expense370,000 310,000 Net income before taxes1,400,000 1,565,000 Income taxes (30%)420,000 469,500 Net income980,000 1,095,500 Common dividends400,000 547,750 Net income retained580,000 547,750 Beginning retained earnings1,360,000 812,250 Ending retained earnings$1,940,000 $1,360,000 To begin your assigment 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 period32 days Average sale period60 days Return on assets9.7 % Debt-to-equity ratio0.65 Times interest earned ratio5.7 Price-earnings ratio10Required:1.Present the balance sheet in common-size format. (Round your percentage answers to 1 decimal place i.e., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column.)2.Present the income statement in common-size format down through net income. (Round your percentage answers to 1 decimal place i.e., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column.)