2 0 Required information Problem 15-15 Comprehensive Ratio Analysis [LO 15-2, LO15-3, LO15-4, LO15-5, L0156] 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 years are as follows Lydex Company Comparative 0a1ance Sheet $ 960,000 Marketable securitiers Accounts receivable, net Inventory Prepaid expenses 2,700,0o0 3,600,000 260,000 , 520,000 1,200,000 300,000 1,800,000 2,000,000 Total current assets Plant and equipment, net Total assets Liabilities and Stockholders Equity 00,000 $17.040,000 $14,550,000 Current liabilities Note payable, 10s 4,010,000 2,980,000 , 640, 000 -3,040,000. Total liabilities Stockhoiders equitys ,500,000 ,500,000 Comnon stock, $75 par value Retained earnings Total stookholders' eqaity Total liabilities and stockholders' equity 517,040,000 14,550,000 Lydex Corpany Comparative incone Statenent and Reconciliation 15,860,000 13,580,00 Sales (all on account Cost of goods aold Gross margin selling and adniniatrative expenses1,006-00010000 Net operating incose Interest expense 66-000306 000 Income taxes (3o) 1,260,000 1,039,500 n dividenda beginaisg retaised earnings Ending retained earnings 1,870,000$ 1,010,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry 40 days 60 days Debt-to-equity zatlo Price-earniegs ratio Return on assets 10 Problem 15-15 Part 1 Required 1. You decide first to assess the company's performance in terms of debt management and profitability Compute the following for both this year and last year: (Round your "Percentage" answers to 1 decimal place and other answers to 2 decimal places.) a. The times interest earned ratio. b. The debt-to-equity ratio. c. The gross margin percentage d. The return on total assets. (Total assets at the beginning of last year were $13,070,000.) e. The return on equity, (Stockholders' equity at the beginning of last year totaled $7.990.250. There has been no change in common stock over the last two years.) f Is the company's financial leverage positive or negative? a. The Prev 5of 11Next>