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:
You havejust 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 nancial statements. including comparing Lydex's performance to its major competitors. The company's nancial statements for the last two years are as follows: Lydex Company Comparative Halance Sheet This Year Last Year Assets Current assets: Cash is. 956,666 $ 1,266,666 Harketable securities 6 366,666 Accounts receivable, net 2,666,666 1,266,666 Inventory 3,596,666 2,466,666 Prepaid expenses 2531933 239.993 Total current assets 1,466,666 5,866,666 Plant and equipment, net 9,566,666 9,646,666 Total assets $15.9561935 $141933.993 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 3,996,666 $ 2,966,666 Note payable, 16% 3,666,666 3,666,666 Total liabilities 2,656,666 6,626,666 Stockholders' equity: Common stock, $26 par value 1,666,666 2,666,666 Retained earnings 2,316,666 1,666,666 Total stockholders' equity 9.3131933 31339.99\" Total liabilities and stockholders' equity $15.9531935 $14agn | Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales [all on account) $ 15,656,666 $ 13,496,666 Cost of goods sold 12,666,666 16,116,666 Gross margin 3,179,966 3,316,999 Selling and administrative expenses 1394.933 1:533:99\" Net operating income 1,466,666 1,226,666 Interest expense 355.333 336.99\" Net income before taxes 1,166,666 1,464,666 Income taxes (36%] 336,666 439,266 Net income "626,666 1,924,999 Common dividends 346,666 512,466 Net income retained 436,666 512,466 Beginning retained earnings 1,866,666 1:357:59\" Ending retained earnings 5 2.319.396 $ 11333.99\" To begin your assignment you gather the following nancial data and ratios that are typical of companies in Lydex Company's industry: Current ratio 2.4 Acid-test ratio 1.2 Average collection period 46days Average sale period 66days Return on assets 9.2% Debt-to-equity ratio 6.65 Times interest earned ratio 5.6 Price-earnings ratio 16 Required: 1. Present the balance sheet in common-size format. 2. Present the income statement in common-size format down through net income. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Present the balance sheet in common-size format. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column.) Lydex Company Common-Size Balance Sheets This Year Last Year Assets Current assets: Cast % % 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 % %Required: 1. Present the balance sheet in common-size format. 2. Present the income statement in common-size format down through net income. Complete this question by entering your answers In the tab: below. -Requlred 1 Required 2 Praenl: the Income statement In common-size formal: down through net Income. (Round your answers to 1 decimal place. Due to rounding, gur may not fully reconcile clown a column.) Sales Cost of goods sold Green margin Net operating income Interest expense Net income before taxes
