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 Yean Assets Current assets Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses 2,860,000 3,640,000 270,000 $ 820,000 1,060,000 300,000 1,960,000 2,400,000 210,000 Total current assets 7,590,000 9,600,000 5,930,000 9,090,000 Plant and equipment, net Total assets Liabilities and Stockholders' Equity $17,190,000 15,020,000 Liabilities Current liabilities Note payable, 10% $ 4,050,000 3,700,000 S 3,060,000 3,100,000 Total liabilities 7,750,000 6,160,000 Stockholders' equity Common stock, $75 par value Retained earnings 7,500,000 1,940,000 7,500,000 1,360,000 8,860,000 $17,190,000 15,020,000 Total stockholders' equity 9,440,000 Total liabilities and stockholders' equity Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) Cost of goods sold $15,900,000 12,720,000 13,980,000 10,485,000 Gross margin Selling and administrative expenses 3,180,000 1,410,000 3,495,000 1,620,000 Net operating income Interest expense 1,770,000 370,000 1,875,000 310,000 Net income before taxes Income taxes (30%) 1,400,000 420,000 1,565,000 469,500 Net income Common dividends 980,000 400,000 1,095,500 547,750 Net income retained Beginning retained earnings 580,000 1,360,000 547,750 812,250 Ending retained earnings $ 1,940,000 1,360,000 To begin your assigment 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 1.2 32 days 60 days 9.7 % 0.65 5.7 10 Required 1. Present the balance sheet in common-size format. (Round your percentage answers to 1 decimal place i.e., 0.123 is considered as 12.3. 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 Marketable securities Accounts receivable, net Inventory Prepaid expenses 0.0 Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: 0.0 0.01% 0.0 | % Current liabilities Note payable, 1096 Total liabilities 0.0 0.0 Stockholders' equity: Common stock, $75 par value Retained earnings Total stockholders' equity Total liabilities and equity 0.0 0.0 0.01% 0.01% 2. Present the income statement in common-size format down through net income. Round your percentage answers to 1 decimal place i.e., 0.123 is considered as 12.3. 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

Question

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:

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Lydex Company Comparative Balance Sheet This Year Last Yean Assets Current assets Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses 2,860,000 3,640,000 270,000 $ 820,000 1,060,000 300,000 1,960,000 2,400,000 210,000 Total current assets 7,590,000 9,600,000 5,930,000 9,090,000 Plant and equipment, net Total assets Liabilities and Stockholders' Equity $17,190,000 15,020,000 Liabilities Current liabilities Note payable, 10% $ 4,050,000 3,700,000 S 3,060,000 3,100,000 Total liabilities 7,750,000 6,160,000 Stockholders' equity Common stock, $75 par value Retained earnings 7,500,000 1,940,000 7,500,000 1,360,000 8,860,000 $17,190,000 15,020,000 Total stockholders' equity 9,440,000 Total liabilities and stockholders' equity Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) Cost of goods sold $15,900,000 12,720,000 13,980,000 10,485,000 Gross margin Selling and administrative expenses 3,180,000 1,410,000 3,495,000 1,620,000 Net operating income Interest expense 1,770,000 370,000 1,875,000 310,000 Net income before taxes Income taxes (30%) 1,400,000 420,000 1,565,000 469,500 Net income Common dividends 980,000 400,000 1,095,500 547,750 Net income retained Beginning retained earnings 580,000 1,360,000 547,750 812,250 Ending retained earnings $ 1,940,000 1,360,000 To begin your assigment 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 1.2 32 days 60 days 9.7 % 0.65 5.7 10 Required 1. Present the balance sheet in common-size format. (Round your percentage answers to 1 decimal place i.e., 0.123 is considered as 12.3. 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 Marketable securities Accounts receivable, net Inventory Prepaid expenses 0.0 Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: 0.0 0.01% 0.0 | % Current liabilities Note payable, 1096 Total liabilities 0.0 0.0 Stockholders' equity: Common stock, $75 par value Retained earnings Total stockholders' equity Total liabilities and equity 0.0 0.0 0.01% 0.01% 2. Present the income statement in common-size format down through net income. Round your percentage answers to 1 decimal place i.e., 0.123 is considered as 12.3. 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