You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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: Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Lydex Company Comparative Balance Sheet This Year Last Year $880,000 0 2,380,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $75 par value 3,520,000 240,000 7,020,000 9,360,000 $ 16,380,000 $ 1,120,000 300,000 1,480,000 2,200,000 180,000 5,280,000 8,970,000 $ 14,250,000 $ 3,930,000 3,620,000 7,550,000 7,500,000 $ 2,820,000 3,020,000 5,840,000 7,500,000 910,000 8,410,000 $ 14,250,000 Retained earnings 1,330,000 Total stockholders' equity 8,830,000 Total liabilities and stockholders' equity $ 16,380,000 Lydex Company Comparative Income Statement and Reconciliation Sales (all on account) Cost of goods sold This Year $ 15,780,000 12,624,000 Last Year $ 12,780,000 9,585,000 Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income Common dividends Net income retained Beginning retained earnings Ending retained earnings 3,156,000 3,195,000 1,794,000 1,572,000 1,362,000 1,623,000 362,000 302,000 1,000,000 1,321,000 300,000 396,300 700,000 924,700 280,000 462,350 420,000 462,350 910,000 447,650 $ 1,330,000 $910,000 To begin your assignment 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-earnings ratio 2.3 1.0 30 days 60 days 8.4% 0.7 5.7 10 2. You decide next to assess the company's stock market performance. Assume that Lydex's stock price at the end of this year is $78 per share and that at the end of last year it was $46. For both this year and last year, compute: (Round your "Percentage" answers to 1 decimal place and other intermediate and final answers to 2 decimal places.) a. The earnings per share. b. The dividend yield ratio. c. The dividend payout ratio. d. The price-earnings ratio. e. The book value per share of common stock. a. The earnings per share b. The dividend yield ratio c. The dividend payout ratio d. The price-earnings ratio e. The book value per share of common stock This Year % Last Year % % 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: Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Lydex Company Comparative Balance Sheet This Year Last Year $880,000 0 2,380,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $75 par value 3,520,000 240,000 7,020,000 9,360,000 $ 16,380,000 $ 1,120,000 300,000 1,480,000 2,200,000 180,000 5,280,000 8,970,000 $ 14,250,000 $ 3,930,000 3,620,000 7,550,000 7,500,000 $ 2,820,000 3,020,000 5,840,000 7,500,000 910,000 8,410,000 $ 14,250,000 Retained earnings 1,330,000 Total stockholders' equity 8,830,000 Total liabilities and stockholders' equity $ 16,380,000 Lydex Company Comparative Income Statement and Reconciliation Sales (all on account) Cost of goods sold This Year $ 15,780,000 12,624,000 Last Year $ 12,780,000 9,585,000 Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income Common dividends Net income retained Beginning retained earnings Ending retained earnings 3,156,000 3,195,000 1,794,000 1,572,000 1,362,000 1,623,000 362,000 302,000 1,000,000 1,321,000 300,000 396,300 700,000 924,700 280,000 462,350 420,000 462,350 910,000 447,650 $ 1,330,000 $910,000 To begin your assignment 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-earnings ratio 2.3 1.0 30 days 60 days 8.4% 0.7 5.7 10 2. You decide next to assess the company's stock market performance. Assume that Lydex's stock price at the end of this year is $78 per share and that at the end of last year it was $46. For both this year and last year, compute: (Round your "Percentage" answers to 1 decimal place and other intermediate and final answers to 2 decimal places.) a. The earnings per share. b. The dividend yield ratio. c. The dividend payout ratio. d. The price-earnings ratio. e. The book value per share of common stock. a. The earnings per share b. The dividend yield ratio c. The dividend payout ratio d. The price-earnings ratio e. The book value per share of common stock This Year % Last Year % %
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Calculating Ending Work in Process, Income Statement Instructions Instructions Amount Descriptions Carter Pelham Tillson Direct materials $210 $615 $1,290 Direct labor 440 700 1,260 Applied overhead...
-
Evaluate the impact of hardware-accelerated security features (such as Intel SGX or AMD SEV) on operating system design. How do these features affect user-space and kernel-space interactions ?
-
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 companys financial statements,...
-
Sandys Socks makes the worlds best socks. Information for the last eight months follows: Prepare a scatter graph by plotting Sandys data on a graph. Then draw a line that you believe best fits the...
-
Explain why iron and copper have the same Lewis electron dot diagram when they have different numbers of electrons.
-
See Figure 11-19 and draw the cooling curves, including appropriate temperatures, expected for the following Al-Si alloys. (a) Al-4% Si; (b) Al-12.6% Si; (c) Al-25% Si; and (d) Al-65% Si.
-
Explain manufacturing systems.
-
Swit, Inc.s comparative balance sheet at January 31, 2013, and 2012, reports the following (in millions): Requirements Three situations about Swits issuance of stock and payment of dividends during...
-
An investor purchased a stock three years ago for $15 and just sold it for $25. What average annual geometric return did she earn?
-
Trace the output of the following program segments: a) 1 2 4 5 7 8 9 10 11 int i = 0, j = 1, k; while (i < 4) { } (i > 1) ? j = j* 2: j = j * 1; for (k = 0; k
-
Give examples of events or circumstances that may trigger impairment testing.
-
_______________ is an incentive offered by the government to encourage the contractor to maximize investment. a. Cost oil b. Profit oil c. Capital uplift d. Overriding royalty e. Domestic market...
-
For purposes of booking impairment, what is an asset group? In oil and gas operations, what asset groups are most common?
-
Which of the following is (are) not an example(s) of a recoverable cost? a. Development bonus b. Overhead c. In-country office costs d. G&G costs e. Development dry-hole costs
-
Define the following terms: run ticket settlement statement thief gauging strapping Henry Hub West Texas Intermediate North Sea Brent Blend Dubai crude
-
You run a successful paper mill and send out your three best personnel to secure new wood pulp sources using due diligence and skill. Applying the agency principles outlined in this chapter, answer...
-
Perform the operation by first converting the numerator and denominator to scientific notation. Write the answer in scientific notation. 7,200,00/0.000009
-
List the professional requirements for internal environmental auditors and external environmental verifiers and identify the groups which may be equipped to undertake this work.
-
Referring to Example 3, the nanopillar data on height (nm) and width ( \(\mathrm{nm})\) are (a) Fit a straight line with \(y=\) height and \(x=\) width by least squares. (b) Test, with...
-
List and briefly explain the advantages that may accrue to companies as a consequence of conducting internal environmental audits and publishing independently verified environmental (or...
Study smarter with the SolutionInn App