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.)

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, 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

Lydex Company Comparative Balance Sheet This Year Last Year This Year % Of Total Assets Last Year % Of Total Assets    Assets    Current assets:       Cash                       950,000 5.60%            1,200,000 8.05%       Marketable securities                                   -   0.00%                300,000 2.01%       Accounts receivable, net                   2,660,000 15.68%            1,760,000 11.81%       Inventory                   3,590,000 21.17%            2,400,000 16.11%       Prepaid expenses                       260,000 1.53%                200,000 1.34%    Total current assets                   7,460,000 43.99%            5,860,000 39.33%    Plant and equipment, net                   9,500,000 56.01%            9,040,000 60.67%    Total assets                 16,960,000 100.00%          14,900,000 100.00%    Liabilities and Stockholders' Equity    Liabilities:       Current liabilities                   3,990,000 23.53%            2,960,000 19.87%       Note payable, 10%                   3,660,000 21.58%            3,060,000 20.54%    Total liabilities                   7,650,000 45.11%            6,020,000 40.40%    Stockholders' equity:        Common stock, $70 par value                   7,000,000 41.27%            7,000,000 46.98%        Retained earnings                   2,310,000 13.62%            1,880,000 12.62%    Total stockholders' equity                   9,310,000 54.89%            8,880,000 59.60%    Total liabilities and stockholders' equity                 16,960,000 100.00%          14,900,000 100.00% Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Amt $ % Amt $ %   Sales (all on account)             15,850,000 100.00%       13,480,000 100.00%   Cost of goods sold             12,680,000 80.00%       10,110,000 75.00%   Gross margin              3,170,000 20.00%         3,370,000 25.00%   Selling and administrative expenses              1,704,000 10.75%         1,600,000 11.87%   Net operating income              1,466,000 9.25%         1,770,000 13.13%   Interest expense                 366,000 2.31%            306,000 2.27%   Net income before taxes              1,100,000 6.94%         1,464,000 10.86%   Income taxes (30%)                 330,000 2.08%            439,200 3.26%   Net income                 770,000 4.86%         1,024,800 7.60%

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

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