You have just been hired as a financial analyst for Lydex Company, a manufacture

Question

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 Balance Sheet This Year Last Year Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses $860,000 1,230,000 300,000 1,920,000 2,300,000 200,000 5,950,000 9,080,000 $17,150,000 $15,030,000 2,820,000 3,630,000 260,000 7,570,000 9,580,000 Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 108 $ 4,550,000 3,040,000 3.080,000 3,680,000 8,230,000 Total liabilities Stockholders' equity: 6,120,000 Total stockholders' equity Total liabilities and stockholders' equity Common stock, $70 par value Retained earnings 7,000,000 1,910,000 8,910,000 $17,150,000 $15,030,000 7,000,000 1,920,000 8,920,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) Cost of goods sold 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 $ 15,890,000 13,880,000 10,410,000 3,470,000 1,616,000 1,854,000 308,000 1,546,000 463,800 1,082,200 541,100 541,100 1,368,900 $ 1,920,000 1,910,000 12,712,000 3,178,000 2,124,286 1,053,714 368,000 685,714 205,714 480,000 470,000 10,000 1,910,000

Explanation / Answer

1)

2)

Lydex Company Common-Size Balance Sheets Normal balance sheet This Year Last Year This Year Last Year Assets Current assets:    Cash 5.0% 8.2%          860,000      1,230,000    Marketable securities 0.0% 2.0%                     -            300,000    Accounts receivable, net 16.4% 12.8%      2,820,000      1,920,000    Inventory 21.2% 15.3%      3,630,000      2,300,000    Prepaid expenses 1.5% 1.3%          260,000          200,000 Total current assets 44.1% 39.6%      7,570,000      5,950,000 Plant and equipment, net 55.9% 60.4%      9,580,000      9,080,000 Total assets 100.0% 100.0%    17,150,000    15,030,000 Liabilities and Stockholders Equity Liabilities:    Current liabilities 26.5% 20.2%      4,550,000      3,040,000    Note payable, 10% 21.5% 20.5%      3,680,000      3,080,000 Total liabilities 48.0% 40.7%      8,230,000      6,120,000 Stockholders equity:    Common stock, $70 par value 40.8% 46.6%      7,000,000      7,000,000    Retained earnings 11.2% 12.7%      1,920,000      1,910,000 Total stockholders equity 52.0% 59.3%      8,920,000      8,910,000 Total liabilities and equity 100.0% 100.0%    17,150,000    15,030,000

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

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