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 5 1,020,000 $ 1,320,000 Marketable Securities 300,000 Accounts receivable, net 2,940,000 2,840,000 Inventory 3,660,000 2,100,000 Prepaid expenses 270,000 218.000 Total current assets 7,890,000 5.970,000 Plant and equipment, net 9.640.000 9,110,000 Total assets 5 17,530,000 $ 15,080,000 Liabilities and Stockholders' Equity Clabilities: Corrent liabilities $ 4,070,080 $ 2,450,000 Note payable, le 3,700,000 3,100,000 Total Liabilities 7.770,000 5,550,000 Stockholders' equity Common stock, 575 par value 7.500.000 Hetained earnings 7,500,000 2.260.000 Total stockholders' equity 2.030,000 9.760,000 2,530, ees Total liabilities and stockholders couity 5 17,530,000 $ 15,050,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,920,000 $14,180,000 Cost of goods sold 12,736,000 10,635,000 Gross margin 3, 184,000 3,545,000 Selling and administrative expenses 2,028,286 1,628,000 Net operating income 1,155,714 1,917,000 Interest expense 370,000 310,000 Net income before taxes 785,714 1,607,000 Income taxes (30%) 235,714 482,100 Net income 550,000 1,124,900 Common dividends 320,000 562,450 Net income retained 230,000 562,450 Beginning retained earnings 2,030,000 1,467,550 Ending retained earnings $ 2,260,000 $ 2,030,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industr Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price tarnings ratio 2.3 1.2 32 days 60 days 9.9% 0.67 5.9 10 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 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, $75 par value Retained earnings Total stockholders' equity Total liabilities and equity % % % % Required 1 Required 2 Present the income statement in common-size format down through net income. (Round your 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 Net income before taxes Income taxes (30%) Net income % %
