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$890,000$1,020,000Marketable securities0300,000Accounts receivable, net2,420,0001,520,000Inventory3,530,0002,300,000Prepaid expenses240,000180,000Total current assets7,080,0005,320,000Plant and equipment, net9,380,0008,980,000Total assets$16,460,000$14,300,000Liabilities and Stockholders' EquityLiabilities:Current liabilities$3,960,000$2,860,000Note payable, 10%3,620,0003,020,000Total liabilities7,580,0005,880,000Stockholders' equity:Common stock, $70 par value7,000,0007,000,000Retained earnings1,880,0001,420,000Total stockholders' equity8,880,0008,420,000Total liabilities and stockholders' equity$16,460,000$14,300,000

Lydex Company

Comparative Income Statement and ReconciliationThis YearLast YearSales (all on account)$15,790,000$12,880,000Cost of goods sold12,632,0009,660,000Gross margin3,158,0003,220,000Selling and administrative expenses1,638,8571,576,000

Net operating income1,519,1431,644,000Interest expense362,000302,000Net income before taxes1,157,1431,342,000Income taxes (30%)347,143402,600Net income810,000939,400Common dividends350,000469,700Net income retained460,000469,700Beginning retained earnings1,420,000950,300Ending retained earnings$1,880,000$1,420,000

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 period40daysAverage sale period60daysReturn on assets8.5%Debt-to-equity ratio0.69Times interest earned ratio5.8Price-earnings ratio10

: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.)

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 $ 890,000 $ 1,020,000 Marketable securities 300,000 Accounts receivable, net 2,420,000 1,520,000 Inventory 3,530,000 2,300,000 Prepaid expenses 240,000 180,000 Total current assets 7,080,000 5,320,000 Plant and equipment, net 9,380,000 8,980,000 Total assets $ 16,460,000 $ 14,300,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 3,960,000 $ 2,860,000 Note payable, 10% 3,620,000 3,020,000 Total liabilities 7,580,000 5,880,000 Stockholders' equity: Common stock, $70 par value 7,000,000 7,000,000 Retained earnings 1,880,000 1,420,000 Total stockholders' equity 8,880,000 8,420,000 Total liabilities and stockholders' equity $ 16,460,000 $ 14,300,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,790,000 $ 12,880,000 Cost of goods sold 12,632,000 9,660,000 Gross margin 3, 158,000 3,220,000 Selling and administrative expenses 1,638,857 1,576,000 Net operating income 1,519,143 1,644,000 Interest expense 362,000 302,000 Net income before taxes 1,157,143 1,342,000 Income taxes (30%) 347,143 402,600 Net income 810,000 939,400 Common dividends 350,000 469,700 Net income retained 460,000 469,700 Beginning retained earnings 1,420,000 950,300 Ending retained earnings $ 1,880,000 $ 1,420,000To begin your assigment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio 2.3 Acid-test ratio 1.2 Average collection period 40 days Average sale period 60 days Return on assets 8.5 % Debt-to-equity ratio 0.69 Times interest earned ratio 5.8 Price-earnings ratio 10 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.) Lydex Company Common-Size Balance Sheets This Year Last 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, $70 par value Retained earnings Total stockholders' equity Total liabilities and equity % %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.) Lydex Company Common-Size Income Statements This Year Last Year Sales % % Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income %