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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, induding 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 Yoar Assets Current asseta Cash $ 870,000 Marketable securities Accounts receivable, net Inventory Prepaid experses 2,340,000 3,510,000 240,000 $ 1,110,000 300,000 1,440,000 2,100,000 180,000 Total current assets Plant and equipment, net 6,960.000 9,340,000 5,130,000 8.900,000 Total assets $16,300.000 $14,000,000 Liabilities and Stockholders' Equity Liabilities: Current labilities Note payable, 10% $ 3,750,000 3,600,000 $ 2.000,000 3,000,000 Total liabilitien 7,350.000 5,660,000 Stockhoiders' equity: Common stock, $70 par value Retained eamings 7.000,000 1,950,000 7,000,000 1430,000 Total stockholders' equity 8.950,000 8,430,000 Total liabilities and stockholders equity $16,300.000 $14,090,000 Lydex Company Comparative Income Statement and Reconciliation Sales (all on account) Cost of goods sold This Year $15,770,000 12,616,000 Last Year $ 12,680,000 9,510,000 Gross margin Selling and administrative expenses 3,154,000 1,551,143 3,170,000 1,568,000 Net operating income Interest expense 1,602,857 360,000 1.602.000 300,000 Net income before taxes Income taxes (30%) 1,242,857 372,857 1,302,000 390,600 Net income Common dividends 870,000 350,000 911,400 455,700 Net income retained Beginning retained eamings 520,000 1,430,000 455,700 974,300 Ending retained eamings $ 1,950,000 $ 1,430,000 To begin your assigment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price-eamings ratio 2.3 12 30 days 60 days 8.3 % 0.67 5.9 10 Required: 1. Present the balance sheet in common-size format. (Round your percentage answers to 1 decimal place L.e., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column.) Lydex Company Common-Size Batance Sheets This Year Last Year Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets % Liabilities and Stockholders' Equity Liabilities Current liabilities Note payable, 10% Total liabilities Stockholders' equity Common stock, $70 par value Retained earnings Total stockholders' equity Tolal iabilities and equity 2. Present the income statement in common-size format down through net income. (Round your percentage answers to 1 decimal place i.e, 0.123 is considered as 12.3. Due to rounding, figurds may not fully reconcile down a column.) Lydex Company Comman-Siza Income Statements This Year Last Year Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income 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, induding 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 Yoar Assets Current asseta Cash $ 870,000 Marketable securities Accounts receivable, net Inventory Prepaid experses 2,340,000 3,510,000 240,000 $ 1,110,000 300,000 1,440,000 2,100,000 180,000 Total current assets Plant and equipment, net 6,960.000 9,340,000 5,130,000 8.900,000 Total assets $16,300.000 $14,000,000 Liabilities and Stockholders' Equity Liabilities: Current labilities Note payable, 10% $ 3,750,000 3,600,000 $ 2.000,000 3,000,000 Total liabilitien 7,350.000 5,660,000 Stockhoiders' equity: Common stock, $70 par value Retained eamings 7.000,000 1,950,000 7,000,000 1430,000 Total stockholders' equity 8.950,000 8,430,000 Total liabilities and stockholders equity $16,300.000 $14,090,000 Lydex Company Comparative Income Statement and Reconciliation Sales (all on account) Cost of goods sold This Year $15,770,000 12,616,000 Last Year $ 12,680,000 9,510,000 Gross margin Selling and administrative expenses 3,154,000 1,551,143 3,170,000 1,568,000 Net operating income Interest expense 1,602,857 360,000 1.602.000 300,000 Net income before taxes Income taxes (30%) 1,242,857 372,857 1,302,000 390,600 Net income Common dividends 870,000 350,000 911,400 455,700 Net income retained Beginning retained eamings 520,000 1,430,000 455,700 974,300 Ending retained eamings $ 1,950,000 $ 1,430,000 To begin your assigment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price-eamings ratio 2.3 12 30 days 60 days 8.3 % 0.67 5.9 10 Required: 1. Present the balance sheet in common-size format. (Round your percentage answers to 1 decimal place L.e., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column.) Lydex Company Common-Size Batance Sheets This Year Last Year Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets % Liabilities and Stockholders' Equity Liabilities Current liabilities Note payable, 10% Total liabilities Stockholders' equity Common stock, $70 par value Retained earnings Total stockholders' equity Tolal iabilities and equity 2. Present the income statement in common-size format down through net income. (Round your percentage answers to 1 decimal place i.e, 0.123 is considered as 12.3. Due to rounding, figurds may not fully reconcile down a column.) Lydex Company Comman-Siza Income Statements This Year Last Year Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income
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Answer rating: 100% (QA)
Solution 1 Lydex Company Commonsize Balance Sheet This Year Last Year Assets Current assets Cash 870... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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