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

Assets

Current assets:

Cash $ $900,000$ $ $1,140,000$

Marketable securities $0300,000$

Accounts receivable, net $2,460,0001,560,000$

Inventory $3,540,0002,400,000$

Prepaid expenses $250,000190,000$

Total current assets $7,150,0005,590,000$

Plant and equipment, net $9,400,0008,990,000$

Total assets $ $16,550,000$ $ $14,580,000$

Liabilities and Stockholders' Equity

Liabilities:

Current liabilities $ $3,950,000$ $ $2,860,000$

Note payable, $10\%3,620,0003,020,000$

Total liabilities $7,570,0005,880,000$

Stockholders' equity:

Common stock, $$75$ par value $7,500,0007,500,000$

Retained earnings $1,480,0001,200,000$

Total stockholders' equity $8,980,0008,700,000$

Total liabilities and stockholders' equity $ $16,550,000$ $ $14,580,000$

Lydex Company

Comparative Income Statement and Reconciliation

This Year Last Year

Sales $($all on account$)$ $ $15,800,000$ $ $12,980,000$

Cost of goods sold $12,640,0009,735,000$

Gross margin $3,160,0003,245,000$

Selling and administrative expenses $1,998,0001,580,000$

Net operating income $1,162,0001,665,000$

Interest expense $362,000302,000$

Net income before taxes $800,0001,363,000$

Income taxes $(30\%)240,000408,900$

Net income $560,000954,100$

Common dividends $280,000477,050$

Net income retained $280,000477,050$

Beginning retained earnings $1,200,000722,950$

Ending retained earnings $ $1,480,000$ $ $1,200,000$

To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company$$s industry:

Current ratio $2\mathrm{.}3$

Acid$-$test ratio $1\mathrm{.}0$

Average collection period $40$ days

Average sale period $60$ days

Return on assets $8\mathrm{.}6\%$

Debt$-$to$-$equity ratio $0\mathrm{.}7$

Times interest earned ratio $5\mathrm{.}9$

Price$-$earnings ratio $10$

Problem $16-15$ Part $2($Algo$)$

$2.$ You decide next to assess the company$$s stock market performance. Assume that Lydex$$s stock price at the end of this year is $$82$ per share and that at the end of last year it was $$50.$ For both this year and last year, compute: $($Round your "Percentage" answers to $1$ decimal place and other intermediate and final answers to $2$ decimal places.$)$

a$.$ The earnings per share.

b$.$ The dividend yield ratio.

c$.$ The dividend payout ratio.

d$.$ The price$-$earnings ratio.

e$.$ The book value per share of common stock