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: 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 Lydex Company Comparative Balance Sheet Stockholders' equity: Common stock, $70 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Lydex Company This Year $ 870,000 0 2,340,000 3,510,000 240,000 6,960,000 9,340,000 $ 16,300,000 $ 3,920,000 3,600,000 7,520,000 7,000,000 1,780,000 8,780,000 $ 16,300,000 Last Year $ 1,110,000 300,000 1,440,000 2,100,000 180,000 5,130,000 8,960,000 $ 14,090,000 $ 2,800,000 3,000,000 5,800,000 7,000,000 1,290,000 8,290,000 $ 14,090,000

To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: performance to its major competitors. The company's financial statements for the last two years are as follows: 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 \$1,580,000) (Use 365 days in a year. Round your intermediote calculations and final answers to 2 decimal place.) e. The average sale period (The inventory at the beginning of last year totaled \$1,940,000) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal ploce.) f The operating cycle. (Round your intermediate calculations and final answers to 2 decimal place.) 9. The total asset turnover. (The total assets at the beginning of last year totaled \$12.980.000) (Round your final answers to 2 decimal places.) 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