Verizon 9:01 PM 30% You have just been hired as a financial analyst for Lydex Co
ID: 2499052 • Letter: V
Question
Verizon 9:01 PM 30% You have just been hired as a financial analyst for Lydex Company, a helmets. Your boss has asked you to perform a comprehensive analysis of the companys financial statements, including comparing Lydex's performance to its major competitors. The company's financial statements for the last two years are as follows: r of safety Lydex Company Comparative Balance Sheet This Yea Last Year Assets Current assets: Cash Marketable securitie Accounts receivable, net Inventory Prepaid expenses S 890,0001,130,000 300,000 2,420,000 520,000 530,000 2,300,000 180,000 240,000 7,080,000 5,430,000 9,380,000 8,980,000 Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity S 16,460,000 14,410,000 Liabilities: Current liabilities Note payable, 10% S 3,940,000 2,840,000 3,620,000 3,020,000Explanation / Answer
Lydex company Details This Year Last Year a Working Capital= Current Asset-Current Laiblities 3,140,000 2,590,000 b Current Ratio=CurrentAsset/Current Laibilities 1.80 1.91 c Acid test ratio=(current asset-inventory-prepaid)/Curremnt Laibilities 0.84 1.04 d Average collection period Average Accounts Receivable 1,970,000 1,560,000 Sales 15,790,000 12,880,000 Creditors Turnover=sales/avg creditor 8.02 8.26 Average collection period=365/Creditors Turnover 45.54 44.21 e Average Sale period Average Inventory 2,915,000 2,130,000 Cost of goods sold 12,632,000 9,660,000 Average Inventory Turover ratio=COGS/Avg Inv 4.33 4.54 Average Sales Period=365/Inventory TO 84.10 73.29 f Opearting Cycle=Avg Sales Period+Credit days 129.64 117.50 g Total Asset TO Average Total Assets 15,435,000 14,475,000 Sales 15,790,000 12,880,000 Total Asset Turnover =Sales/Average total assets 1.023 0.890
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