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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

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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 Lydexs performance to its major competifors 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 $ 1.020,000 $ 1,320,000 Marketable securities 0 300,000 Accounts receivable, net 2,940,000 2.040,000 Inventory 3,660.000 2.100,000 Prepaid expenses 270,000 210,000 Total current assets 7 890,000 5,970,000 Plant and equipment, net 9.640,000 9,110,000 Total assets $ 17530,000 $ 15,080,000 Liabilities and Stockholders' Equity Liabilities Current liabilities $ 4070 000 $ 2,450,000 Note payable, 10% 3,700,000 3,100,000 Total liabilities 7.770.000 5,550,000 Stockholders equity Common stock $75 par value 7.500.000 Retained earrings 7,500,000 2260 000 2030 000 Total stockholders' equity 9,760,000 9,530,000 Total abilities and stockholders equity $17530 000 $15.080.000 Lydex Company Comparative Income Statement and Reconciation This Year Last Year Sales (all on account) $15 920 000 $ 14,180 000 Cost of goods sold 12.736.000 10.635.000 Gross margin 3.184.000 3.545.000 Selling and administrative expenses 2008 298 1 628,000 Net operating income Interest expense Net income before boxes Income taxes (3095) Net income Common dividends Net income retained Beginning retained amings Ending and carings 1.917.000 310.000 1.607.000 432.100 1.155 714 370 000 785 714 235,714 550 000 320.000 230,000 2.030 000 5 2.250 000 1124 300 582.450 582.450 1.467 550 $ 2030 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 rabo Times interest eamed ratio Prce-earnings ratio 23 12 32 days 60 days 99% 0.67 5.9 10 Required: 1. Present the balance sheet in common-size format (Round your percentage answers to 1 decimal place le., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column) Last Year 96 Lydex Company Common Size Balance Sheets This Year Assets Current assets Cash Marketable secunities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment net Total assets Liabilities and Stockholders' Equity Liabilities Current abilities Note payable, 10% Total liabilities Stockholders equity Common stock 575 par value Retained emings Total stockholders equity Total abilities and equity 96 2. Present the income statement common se format down the come Round your percentage answers to 1 decimal place be0 123 is considered as 12.3. Due to rounding figures may not fully reconcile down a column) Lydex Company Common-Suincome Statements This Year Tea 2. Present the income statement in common-size format down through net income. (Round you 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.) Last Year % Lydex Company Common-Size Income Statements This 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 % %

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