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 The Year Last Year Ansata Current Assets Cash $ 1.010,000 $1,250,000 Marketable securities 300,000 Accounts receivable, net 2.900.000 2.000.000 Inventory 3,650,000 2,000,000 Prepaid expenses 270.000 210,000 Total current site 7.830,000 5,760,000 plant and equipment, bet 9.620.000 2.100.000 Total asuta $17.650.000 $14.060,000 Llabilities and stockholders' Iquity Liabilities: Current liabilities 54.000.000 $3,000,000 Note payable 101 2,200.000 2.100,000 Total liabilities 7.760.000 6.180,000 Stockholders equity Common stock. 570 par value 7.000.000 7.000,000 Retained earning 2.590.000 1.680.000 Total stockholders equity 3.590.000 3,680,000 Total liabilities and stockholders' equity $17.450.000 $14,860.000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,910,000 $ 14,080,000 Cost of goods sold 12, 728,000 10,560,000 Gross margin 3,182,000 3,520,000 Selling and administrative expenses 912,000 1,624,000 Net operating income 2,270,000 1,896,000 Interest expense 370,000 310,000 Net income before taxes 1,900,000 1,586,000 Income taxes (309) 570,000 475,800 Net income 1,330,000 1,110,200 Common dividends 320,000 555, 100 Net income retained 1,010,000 555, 100 Beginning retained earnings 1,680,000 1,124,900 Ending retained earnings $ 2,690,000 $ 1,680,000 To begin your assignment you gether the following financial data and ratios that are typical of companies in Lydex Company's industry Current ratio d.teet ratio Average collection period wa wale period oturste Debt-to-equity ratio Interest ratio 1.1 32 day. 60 day 9.00 0. 5. 10 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and last year, computer 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 $1720,000) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) e. The average sale period. (The inventory at the beginning of last year totaled $2,080,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) 1. The operating cycle(Round your intermediate calculations and final answers to 2 decimal place.) 9. The total asset turnover. (The total assets at the beginning of last year totaled $13,120,000. (Round your final answers to 2 decimal places.) This Year Last Year Working capital b. The current ratio The acides to d. The average collection period The average sale period The operating cycle The total se turnover days days dayu days days days
