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 SheetThis YearLast YearAssetsCurrent assets:Cash$820,000$1,250,000Marketable securities0300,000Accounts receivable, net2,300,0001,400,000Inventory3,500,0002,000,000Prepaid expenses240,000180,000Total current assets6,860,0005,130,000Plant and equipment, net9,320,0008,950,000Total assets$16,180,000$14,080,000Liabilities and Stockholders' EquityLiabilities:Current liabilities$3,910,000$2,780,000Note payable, 10%3,600,0003,000,000Total liabilities7,510,0005,780,000Stockholders' equity:Common stock, $75 par value7,500,0007,500,000Retained earnings1,170,000800,000Total stockholders' equity8,670,0008,300,000Total liabilities and stockholders' equity$16,180,000$14,080,000

Lydex Company

Comparative Income Statement and ReconciliationThis YearLast YearSales (all on account)$15,760,000$12,580,000Cost of goods sold12,608,0009,435,000Gross margin3,152,0003,145,000Selling and administrative expenses1,863,4291,564,000

Net operating income1,288,5711,581,000Interest expense360,000300,000Net income before taxes928,5711,281,000Income taxes (30%)278,571384,300Net income650,000896,700Common dividends280,000448,350Net income retained370,000448,350Beginning retained earnings800,000351,650Ending retained earnings$1,170,000$800,000

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

Current ratio2.3Acid-test ratio1.2Average collection period30daysAverage sale period60daysReturn on assets8.2%Debt-to-equity ratio0.66Times interest earned ratio5.8Price-earnings ratio10

Required: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.)