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: Last Year Lydex Company Comparative Balance Sheet This Year Assets Current assets Cash $845,000 Marketable securities Accounts receivable, net 2,700,000 Inventory 3,600,000 Prepaid expenses 260,000 Total current assets 7,405,000 Plant and equipment, net 9,520,000 Total assets $ 16,925,000 $ 1,200,000 300,000 1,800,000 2,000,000 200,000 5,500,000 9,050,000 $ 14,550,000 $ 4,010,000 3,660,000 7,670,000 $ 2,600,000 3,060,000 5,660,000 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 7,500,000 1,755,000 7,500,000 1,390,000 8,890,000 9,255,000 $ 16,925,000 $ 14,550,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on accounty $ 15,860,000 $ 13,580,000 Cost of goods sold 12,688,000 10,185,000 Gross margin 3,172,000 3,395,000 Selling and administrative expenses 1,713,143 1,604,000 1,458,857 366,000 1,791,000 306,000 1,092,857 327,857 Net operating income Interest expense Net income before taxes Income taxes (30%) Net income Common dividends Net Income retained Beginning retained earnings Ending retained earnings 1,485,000 446,500 1,039,500 519,750 765,000 400,000 365,000 1,390,000 $ 1,755,000 519,750 870, 250 $ 1,390,000 To begin your assigment you gather tho following financini 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 interesteamed ratio Price-camnings ratio 2.4 1.2 40 days 60 days 9.3% 0.66 5.9 10 Required: 1. Present the balance sheet in common-size format. (Round your percentage answers to 1 decimal place L.o., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column.) Last Year % % % Lydex Company Common-Size Balance Sheets This Year 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, 575 par value Retained earnings Total stockholders equity Total liabilities and equity % % 2. Present the income staternent in common size format down through net income. (Round your percentage answers to 1 decimal place 1.0, 0.123 is considered as 12.3. 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 experises Net operating income Interest expense Net Income before taxes Income taxes (30%) Net income