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 $ 970,000 $ 1,218,800 Marketable securities 3ee, ose Accounts receivable, net 2,740, e 1,840,000 Inventory 3,610,00 2,100,eee Prepaid expenses 260.ee 200. eee Total current assets 7,580,000 5,650,000 plant and equipment, net 9.540,000 9,060,000 Total assets $17,120,000 $ 14,710,000 Liabilities and Stockholders' Equity Liabilities: . Current liabilities $ 4,020,000 $ 3,008, Bea Note payable, 10% 3,680,000 3, BHO,00 Total liabilities 2,700 6,00.000 Stockholders' equity! Common stock, 370 par value 2000, 7.ee, cee Retained earnings 2.420.00 1.530 000 Total stockholders' equity 9420) 2. Total liabilities and stockholders' equity $17,120,00 $ 14,750,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,878,880 $ 13,680, eee Cost of goods sold 12,696,eee 10, 260, eee Gross margin 3, 174,899 3,420,000 Selling and administrative expenses 1,186,eee 1,608, eee Net operating income 2,868, eee Interest expense 1,812, eee 368, see 388, eee Net income before taxes 1,700, eee Income taxes (30%) 1,584, eee 510, eee 451,200 Net income 1,190,000 1,852,8ee Common dividends 4ee, eee 526, 400 Net income retained 790,000 526,400 Beginning retained earnings 1,639, ese 1,183, 60e Ending retained earnings $ 2, 420,000 $1,630, eee 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-earnings ratio 2.4 1.1 48 days 68 days 9.4% 0.7 5.7 10 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 $1,680,000.) (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 $2,040,000.) (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 $14,620,000.) (Round your final answers to 2 decimal places.) This Year Last Year a Woring capital b The current ratio The acid-test ratio The average collection period The average sale period The operating cycle The total asset tuovat days days days days days days