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:

Required:

You decide first to assess the companys performance in terms of debt management and profitability. Compute the following for both this year and last year: d. The return on total assets. (Total assets at the beginning of last year were $13,050,000.)

e. The return on equity. (Stockholders equity at the beginning of last year totaled $8,214,950. There has been no change in common stock over the last two years.) Please provide step by step, thanks.

To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: \begin{tabular}{|l|l|l|} \hline & This Year & Last Year \\ \hline d. The return on total assets & & \\ \hline e. The return on equity & & \\ \hline \end{tabular}