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: Assets Lydex Company Comparative Balance Sheet This Year Last Year 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 Lydex Company $ 1,020,000 0 2,940,000 3,660,000 270,000 7,890,000 9,640,000 $ 17,530,000 $ 1,320,000 300,000 2,040,000 2,100,000 210,000 5,970,000 9,110,000 $ 15,080,000 $ 4,070,000 3,700,000 7,770,000 $ 2,450,000 3,100,000 5,550,000 7,500,000 2,260,000 9,760,000 7,500,000 2,030,000 9,530,000 $ 17,530,000 $ 15,080,000 Comparative Income Statement and Reconciliation Sales (all on account) Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income Common dividends This Year $ 15,920,000 12,736,000 3,184,000 2,028,286 Last Year $ 14,180,000 10,635,000 3,545,000 1,628,000 1,155,714 1,917,000 370,000 310,000 785,714 1,607,000 235,714 482,100 550,000 320.000 1,124,900 562.450