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 $ 1,210,000 Marketable securities 300,000 Accounts receivable, net 2,740,000 1,840,000 Inventory 3,610,000 2,100,000 Prepaid expenses 260,000 200,000 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 $ 3,000,000 Note payable, 10% 3,680,000 3,680,000 Total liabilities 7,700,000 6,080,000 Stockholders. equity: Common stock, s70 par value 7,000,000 7,000,000 Retained earnings 2,420,000 1,630,000 Total stockholders' equity 9,420,800 8,630,000 Total liabilities and stockholders' equity $ 17,120,000 $ 14,710,000 Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,870,000 Cost of goods sold 12,696,000 Gross margin 3,174,000 Selling and administrative expenses 1,106,000 Net operating income 2,068,000 Interest expense 368,000 Net Income before taxes 1,700,000 TRAMA.ner 2011 519 Ana Last Year $ 13,680,000 10,260,000 3,420,000 1,608,000 1,812,000 308,000 1,504,000 451 201 we Prev 1 of 4 Next > Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (304) Net income Common dividends Net income retained Beginning retained earnings Ending retained earnings 1,106,000 2,068,000 368,000 1,700,000 510,000 1,190,000 800,000 790,000 1,630,000 $ 2,420,000 1,608,000 1,812,000 308,000 1,504,000 451,200 1,052,800 526,400 526,400 1,103,600 $ 1,630,000 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-earnings ratio 2.4 1.2 40 days 60 days 9.49 .67 5.7 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 Present the balance sheet in common-size format. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column.) Lydex Company Common-Size Balance Sheets Prev 1 of 4 Next > Required 1 Required 2 Present the balance sheet in common-size format. (Round your answers to 1 decimal place. Due to rounding, figures may not fully reconcile down a column.) 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, $70 par value Retained earnings Total stockholders' equity Total liabilities and equity % % % % % Prev 1 of 4 Next > Complete this question by entering your answers in the tabs below. Required 1 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) Lydex Company Common-Size Income Statements This Year Last 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