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 Current assets: Lydex Company Comparative Balance Sheet This Year Last Year 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, $70 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Lydex Company $ 1,050,000 3,060,000 3,400,000 240,000 7,750,000 9,700,000 $ 17,450,000 $ 1,360,000 300,000 2,160,000 2,400,000 220,000 6,440,000 9,140,000 $ 15,580,000 $ 4,400,000 3,720,000 8,120,000 $ 3,160,000 3,120,000 6,280,000 7,000,000 2,330,000 9,330,000 7,000,000 2,300,000 9,300,000 $ 17,450,000 $ 15,580,000 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 Net income retained Beginning retained earnings Ending retained earnings This Year $ 15,950,000 12,760,000 3,190,000 Last Year $ 14,480,000 10,860,000 3,620,000 2,018,000 1,640,000 1,172,000 1,980,000 372,000 312,000 800,000 1,668,000 240,000 500,400 560,000 1,167,600 530,000 30,000 2,300,000 $ 2,330,000 583,800 583,800 1,716,200 $ 2,300,000