you have just been hired as a financial analyst for lydex company 1552140

You have j ust been hired as a financial analyst for Lydex Company. a manufacturer of safety helmets. Yo boss has asked you to perform a comprehensive analysis of the company’s financial statements, includin comparing Lydex’s performance to its major competitors. The company’s financial statements for the as two years are as follows:

Lydex Company Comparative Balance Sheet This Year Last Year

Assets Current assets. Cash $ 1.020.000 Marketable securities 0 Accounts receivable, net 2.940,000 Inventory 3,660,000 Prepaid expenses 270,000 Total current assets 7,890.000 Plant and equipment net 9,640,000 Total assets $17.530,000 Liabilities and Stockholders’ Equity Liabilities. Current liabilities S 4,070,000 Note payable. 10% 3,700,000 Total liabilities 7,770,000 Stockholders’ equity: Common stock, 575 par value 7.500.000 Retained earnings 2,260.000 Total stockholders’ equity 9,760,000 Total liabilities and stockholders’ equity 517.530.000

$ 1.320,000 300,000 2.040.000 2.100,000 210.000 5,970,000

9,110,000 $15,080,000

S 2,450,000 3,100 000

5.550,000

7,500.000 2,030,000

9,530,000

815.080.000

Lydex Company Comparative Income Statement and Reconciliation

This Year Last Year Sales (all on account) $15.920,000 $ 14,180.000 Cost of goods sold 12,736,000 10,635,000 Gross margin 3.184,000 3.545,000 Selling and admsnistratrve expenses 2.028,286 1,628.000 — — Wet operating income Interest expense 1.105,714 370.000 1,917.000 310,000