5.Award: 12.21 out of 15.00 points rd: 12.21 out of 15.00 points You have j ust

Question

5.Award: 12.21 out of 15.00 points rd: 12.21 out of 15.00 points You have j ust 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 Last Year Assets Current assets: Cash 2,700,000 3,600,000 260,000 845,000 1,200,000 300,000 1,800,000 2,000,000 200,000 Accounts receivable, net Inventory Prepaid expenses 7.405,000 9,520,000 5,500,000 9,050,000 Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity $16,925,000 $14,550,000 Liabilities: Current liabilities Note payable, 10% S 4,010,000 3,660,000 2,600,000 3,060,000 Total liabilities 7,670,000 5,660,000 Stockholders' equity: Common stock, $75 par value Retained earnings 7,500,000 1,755,000 7,500,000 1,390,000 8,890,000 $16,925,000 $14,550,000 Total stockholders' equity 9,255,000 Total liabilities and stockholders' equity Lydex Company Comparative Income Statement and Reconciliation

Explanation / Answer

Answer

Answer 1

Lydex Company

Common size Balance sheet

Figures in $

Particulars

This year

Last year

Assets

Current assets

Cash

845000

5.0%

1200000

8.2%

Marketable securities

0

0.0%

300000

2.1%

Accounts receivables net

2700000

16.0%

1800000

12.4%

Inventory

3600000

21.3%

2000000

13.7%

Prepaid expenses

260000

1.5%

200000

1.4%

Total current assets

7405000

43.8%

5500000

37.8%

Plant and Equipment, net

9520000

56.2%

9050000

62.2%

Total Assets

16925000

100.0%

14550000

100.0%

Liabilities and Stockholders' Equity

Liabilities

Current liabilities

4010000

23.7%

2600000

17.9%

Note payable 10%

3660000

21.6%

3060000

21.0%

Total liabilities

7670000

45.3%

5660000

38.9%

Stockholder's equity

Common stock , $ 75 par value

7500000

44.3%

7500000

51.5%

Retained earnings

1755000

10.4%

1390000

9.6%

Total stock holder's equity

9255000

54.7%

8890000

61.1%

Total liabilities and and stock holder's equity

16925000

100.0%

14550000

100.0%

Answer 2

Lydex Company

Common size income statements

Figures in $

Particulars

This year

Last year

Sales

15860000

100.0%

13580000

100.0%

Cost of goods sold

12688000

80.0%

10185000

75.0%

Gross margin

3172000

20.0%

3395000

25.0%

Selling and administrative expenses

1713143

10.8%

1604000

11.8%

Net operating income

1458857

9.2%

1791000

13.2%

Interest expense

366000

2.3%

306000

2.3%

Net income before taxes

1092857

6.9%

1485000

10.9%

Income taxes (30%)

327857

2.1%

445500

3.3%

Net income

765000

4.8%

1039500

7.7%

Lydex Company

Common size Balance sheet

Figures in $

Particulars

This year

Last year

Assets

Current assets

Cash

845000

5.0%

1200000

8.2%

Marketable securities

0

0.0%

300000

2.1%

Accounts receivables net

2700000

16.0%

1800000

12.4%

Inventory

3600000

21.3%

2000000

13.7%

Prepaid expenses

260000

1.5%

200000

1.4%

Total current assets

7405000

43.8%

5500000

37.8%

Plant and Equipment, net

9520000

56.2%

9050000

62.2%

Total Assets

16925000

100.0%

14550000

100.0%

Liabilities and Stockholders' Equity

Liabilities

Current liabilities

4010000

23.7%

2600000

17.9%

Note payable 10%

3660000

21.6%

3060000

21.0%

Total liabilities

7670000

45.3%

5660000

38.9%

Stockholder's equity

Common stock , $ 75 par value

7500000

44.3%

7500000

51.5%

Retained earnings

1755000

10.4%

1390000

9.6%

Total stock holder's equity

9255000

54.7%

8890000

61.1%

Total liabilities and and stock holder's equity

16925000

100.0%

14550000

100.0%

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