You have j ust been hired as a financial analyst for Lydex Company, a manufactur

Question

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:

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

Present the balance sheet in common-size format. (Round your percentage answers to 1 decimal place (i.e., 0.123 is considered as 12.3.) Due to rounding, figures may not fully reconcile down a column.)

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:

Explanation / Answer

This year Last year Assets   Current assets:      Cash 5.4% 7.1%      Marketable securities 0.0% 2.1%      Accounts receivable, net 14.9% 10.8%      Inventory 21.4% 16.6%      Prepaid expenses 1.5% 1.3%   Total current assets 43.2% 37.9%   Plant and equipment, net 56.8% 62.1%   Total assets 100.0% 100.0%   Liabilities and Stockholders' Equity   Liabilities:      Current liabilities 23.9% 19.8%      Note payable, 10% 21.9% 20.9%   Total liabilities 45.7% 40.6%   Stockholders' equity:       Common stock, $75 par value 45.3% 51.8%       Retained earnings 8.9% 7.5%   Total stockholders' equity 54.3% 59.4%   Total liabilities and stockholders' equity 100.0% 100.0%

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