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You have just been hired as a tinancial analyst tor Lydex Company, a manutacturer of satety helmets. Your boss has asked /ou to perform a
You have just been hired as a tinancial analyst tor Lydex Company, a manutacturer of satety helmets. Your boss has asked /ou to perform a comprehensive analysis of the company's financial statements, including comparing Lydex's performance o its major competitors. The company's financial statements for the last two years are as follows: To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: 1. You decide first to assess the company's performance in terms of debt management and profitability. Compute the following for both this year and last year: (Round your "Percentage" answers to 1 decimal place and other answers to 2 decimal places.) a. The times interest earned ratio. b. The debt-to-equity ratio. c. The gross margin percentage. 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.) f. Is the company's financial leverage positive or negative
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