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 $ 930,000 2,580,000 3,570,000 250,000 7.330,000 9.460.000 $16,790,000 $ 1,170,000 300,000 1,680,000 2,200,000 190,000 5:540,000 9,020,000 $14,560,000 Assets Current anset Cash Marketable securities Accounts receivable, not Inventory Propaid expenses Total current aneta plant and equipment, net Zotal anset Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 104 Total Liabilities Stockholders' equity Common stock, 070 par value Retained earning Total stockholders equity Total liabilities and stockholders' equity $ 3,980,000 2.640.000 2.620,000 $2.920,000 3.040,000 5.960.000 7,000,000 2,170,000 9.170.000 $16,790,000 7,000,000 1,600,000 0.600.000 $14.560,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales all on account) $ 15,830,000 13, 280,000 Cost of goods sold 12,664,000 9960/000 1 Gross margin 3.166,000 3,320,000 Selling and administrative expenses 1, 402,000 11.592000 Net operating income 1.764,000 1,728,000 Interest expense 364,000 304,000 Net income before taxes 1,400,000 1424 000 Income taxes (30%) 420.000 427,200 Net income 980,000 996800 Common dividends 410,000 4982400 Net income retained 570,000 498,400 Beginning retained earnings 1.600,000 LLOLL600 Ending retained earnings $ 2,170,000 SN 1,600,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price-earning ratio 2.3 1.2 40 days dayd 60 days 8.95 0.68 10 Required: 1. Present the balance sheet in common size format 2. Present the income statement in common-size format down through net income. Last Year % % Lydex Company Common-Size Balance Sheets This 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, S70 par value Retained earnings Total stockholders' equity Total abilities and equity % Required 2 > Present the income statement in common-size format down through net income. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column) Last Year % Lydex Company Common-Size Income Statements This Year Sales % Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Not income before taxes Income taxes (30%) Not income %