You have just been hired as a financial analyst for Lydex Company, a manufacture

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 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:

       To begin your assigment you gather the following financial data and ratios that are typical of companies in Lydex Company’s industry:

You decide next to assess the company’s stock market performance. Assume that Lydex’s stock price at the end of this year is $80 per share and that at the end of last year it was $48. For both this year and last year, compute: (Round your intermediate calculations and final percentage answers to 1 decimal place. i.e., 0.123 should be considered as 12.3%. Round the rest of the intermediate calculations and final answers to 2 decimal places.)

The book value per share of common stock.

You decide, finally, to assess the company’s liquidity and asset management. For both this year and last year, compute: (Use 365 days in a year. Round your intermediate calculations and final answer 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:

Explanation / Answer

2 This year Last year

  a Earning per share (Net income /outstanding shares) $700000 / 100000 $939400/100000

= $7 $9.39

  b dividend yield ratio(dividend per share/market price) $350000/100000 $469700/100000

$80 $48

   = 4.38% =9.79%

   c.Dividend payout(Total dividend / net income) = $350000/$700000 $469700/$939400

=50% =50%

   d. Price earning ratio(Market price / EPS) $80/$7 $48/$9.39

=$11.43 =$5.11

   e. Book value per share of common stock

(shareholder Equity/outstanding share) $8900000/100000 $8550000/100000

   =$89 =$85.5

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