[The following Information applies to the questions displayed below.] You have j

Question

[The following Information applies to the questions displayed below.] 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 vears are as follows: Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash Marketable securitles Accounts recelvable, net Inventory Prepald expenses $ 880,000 $ 1120,000 300,000 1480,000 2,200,000 180,000 0 2,380,000 3,520,000 240,000 Total current assets Plant and equipment, net 7,020,000 9,360,000 5,280,000 8,970,000 Total assets $16,380,000 $14,250,000 Liabilties and Stockholders' Equity Liablities: Current llablities Note payable, 10% $ 3,930,000 3,620,000 $ 2,820,000 3,020,000 Total lablities 7,550,000 5,840,000 Stockholders' equity Common stock, $75 par value Retained earnings 7,500,000 1,330,000 7,500,000 910,000 Total stockholders' equity 8,830,000 8,410,000 Total liabilitles and stockholders' equity $16,380,000 $14,250,000

Explanation / Answer

This Year Last Year a Working Capital                                           3,090,000                             2,460,000 b Current Ratio                                                      1.79 :1                                        1.87 :1 c Acid Test Ratio(Quick Ratio)                                                      0.83 :1 1.03 :1 d Average collection period                                                         45 Days                                           44 Days Workings a Working Capital 7020000-3930000 5280000-2820000 Current assets - Current liabilities                                           3,090,000                             2,460,000 b Current Ratio 7020000/3930000 5280000/2820000 Current assets / Current liabilities                                                      1.79                                        1.87 c Acid Test Ratio(Quick Ratio) (7020000-3520000-240000)/3930000 (5280000-2200000-180000)/2820000 Total Current Asset -Inventory - Prepaid expenses / Current liabilities                                                      0.83 1.03 d Average collection period 365 / Receivable Turn over =365/8.18 =365/8.33                                                         45                                           44 Accounts Receivable Turn Over Sales / Avg Acount Receivables 15780000/(2380000+1480000)/2 12780000/(1590000+1480000)/2                                                      8.18                                        8.33 As per Chegg Guidelines We need to answer first 4 question Please add other questions again…we will solve it

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.