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 companys financial statements, including comparing Lydexs performance to its major competitors. The companys financial statements for the last two years are as follows:

Lydex Company Comparative Balance Sheet This Year Last Year $ 950,000 0 2,660,000 3,590,000 260,000 7,460,000 9,500,000 $ 16,960,000 $ 1,200,000 300,000 1,760,000 2,400,000 200,000 5,860,000 9,040,000 $ 14,900,000 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 stockholders' equity $ 3,990,000 3,660,000 7,650,000 $ 2,960,000 3,060,000 6,020,000 7,000,000 2,310,000 9,310,000 $ 16,960,000 7,000,000 1,880,000 8,880,000 $ 14,900,000 Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,850,000 Cost of goods sold 12,680,000 Gross margin 3,170,000 Selling and administrative expenses 1,704,000 Net operating income 1,466,000 Interest expense 366,000 Net income before taxes 1,100,000 Income taxes (30%) 330,000 Net income 770,000 Common dividends 340,000 Net income retained 430,000 Beginning retained earnings 1,880,000 Ending retained earnings $ 2,310,000 Last Year $ 13,480,000 10,110,000 3,370,000 1,600,000 1,770,000 306,000 1,464,000 439,200 1,024,800 512,400 512,400 1,367,600 $ 1,880,000 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 9.2% 0.65 5.8 10 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 This Year Last Year Assets Current assets: Cash % % 0.0 0.0 0.0 % 0.0 % 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 % % 0.0 0.0 0.0 0.0 % 0.0 0.0 % 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 % %