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 Assets Last Year Current assets: Cash $ 910,000 Marketable securities $ 1,150,000 300,000 Accounts receivable, net 2,500,000 1,600,000 Inventory 3,550,000 2,000,000 Prepaid expenses 250,000 190,000 Total current assets 7,210,000 5,240,000 Plant and equipment, net 9,420,000 9,000,000 Total assets $ 16,630,000 $ 14,240,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 3,960,000 $ 2,850,000 Note payable, 10% 3,640,000 3,840,000 Total liabilities 7,600,000 5,920,000 Stockholders' equity Common stock, $70 par value 7,000,000 7,000,000 Retained earnings 2,030,000 1,320,000 Total stockholders' equity 9,030,000 8.320.000 $ 16,630,000 $ 14,240,000 Total liabilities and stockholders' equity Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,818,00 Cost of goods sold 12,648.000 Gross margin 3,162,000 Selling and administrative expenses 1.298,000 Net operating income 1,864,000 Interest expense 364,800 Met income before taxes 1,500,000 ASA.. Last Year $ 13,080,000 9,810, 680 3,278,000 1,584, eee 1,686,000 304,000 1,382,600 414,660 Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,810,000 Cost of goods sold 12,648,000 Gross margin 3,162,000 Selling and administrative expenses 1,298.000 Net operating income 1,864,000 Interest expense 364,000 Net income before taxes 1,500,000 Income taxes (383) 450,000 Net income 1,850,000 Common dividends 340,000 Net Income retained 718,000 Beginning retained earnings 1,320,000 Ending retained earnings $ 2,030,000 Last Year $ 13,880,000 9.819,000 3,270,000 1,584,000 1,686,000 304,000 1,382,000 414,600 967,400 483,700 483,700 836,300 $ 1,320,000 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 2.3 1.0 40 days 60 days 8.7% 8.7 5.7 10 Foblem 14-15 Part 3 (Algo) You decide, finally, to assess the company's liquidity and asset management For both this year and last year, compute: Working capital The current ratio. (Round your final answers to 2 decimal places.) The acid-test ratio. (Round your final answers to 2 decimal places.) The average collection period (The accounts receivable at the beginning of last year totaled $1,620,000) (Use 365 days in a year. und your intermediate calculations and final onswers to 2 decimal place.) Thenint the beginning of last year totaled $1.980,000.) (Use 365 days in a year. Round your 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 $1620000 (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 $1,980,000) (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.) g. The total asset turnover. (The total assets at the beginning of last year totaled $13,020,000) (Round your final answers to 2 decimal places.) This Year Last Year a. Working capital b. The current rallo C. The add-test ratio d. The average collection period 6. The average sale period The operating cycle The total asset turnover days days days days days days