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: Last Year 20:20 Lydex Company Comparative Balance sheet This Year Assets Current asset Coah 910,000 Marketable securities Accounts receivable, net 2,500,000 Inventory 3,550,000 Prepaid expenses 250.000 Total current annet 7.220,000 Plant and equipment, not 9,420,000 Total asset $16.630,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities 3,960,000 Note payabia, 104 3.640,000 Total abilities 7,600,000 Stockholders' equity Common stock, $70 par value 2.000.000 Retained earning 2,030.000 Total stockholders' equity 9.030,000 Total abilities and stockholders' equity $16,630,000 $1,150,000 300,000 1,600,000 2,000,000 190.000 5.240,000 9,000,000 $14,240,000 Ded OOK $ 2,880,000 2.040.000 5.920,000 7.000.000 1,320,000 9,320,000 $14.240,000 cos Lydex Company Comparative Income Statement and Reconciliation This Year Laat Yes Salon (all on account) $ 15,310.000 $13.000.000 Coat of goods sold 12.648.000 9.010,000 Gross margin 1.162.000 3.270.000 Selling and administrative expenses 1,290.000 3,500.000 Het operating income 1.864,000 1.606,000 Interest oxpono 369.000 304.000 Not Income before Laxou 1,500,000 1382.000 Testone taxes (309) 450,000 414.600 6 it 3 of 3 Lydex Company Comparative Tncome Statement and Reconciliation This Year Last Year Salen (all on account) $ 15,810,000 $13,080,000 Cont of goods sold 12,648,000 9,810,000 Gross margin 3,162,000 3,270,000 Selling and administrative expenses 1.299,000 1.5R4,000 Net operating income 1,864,000 1,686,000 Interest expense 360,000 304,000 Net income before taxes 1.500,000 1, 382,000 Income taxes (309) 450,000 414,600 Net Income 1.050,000 967,400 Common dividende 340,000 403,700 Net Income retained 710,000 483,700 Beginning retained earnings 1.320.000 836,300 Ending retained earninga $ 2.030,000 $ 1,320,000 23 01:19:50 Skipped book To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Print Current ratio Noid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Tineo interest earned ratio Price-earnings ratio 2. 1.0 40 days 60 days 8.78 0.7 Roferences 10 V 4 Part of 3 15 points 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and last year, compute: a. Working capital b. The current ratio. (Round your final answers to 2 decimal places.) c. The acid-test ratio. (Round your final answers to 2 decimal places) d. The average collection period (The accounts receivable at the beginning of last year totaled $1.620,000) (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal place) e. The average sale period. (The inventory at the beginning of last year totaled $1,980,000) (Use 365 days in a yout. Round your Intermediate calculations and final answer to 2 decimal place) The operating cycle(Round your intermediate calculations and final answer to 2 decimal place.) g. The total asset turnover (The total assets at the beginning of last year totaled $13,020,000) (Round your final answers to 2 decimal places.) 80034 wed This Year Lal Year Working at The current o The old test ratio d. The average collection period The average sale period The opening cyclo 9 The total asset mover day days days days days Suncos