Required informationProblem 14-15 (Algo) Comprehensive Ratio Analysis [LO14-2, LO14-3, LO14-4, LO14-5, LO14-6][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 askedyou to perform a comprehensive analysis of the company's financial statements, including comparing Lydex's performanceto its major competitors. The company's financial statements for the last two years are as follows:AssetsCurrent assets:CashMarketable securitiesAccounts receivable, netInventoryPrepaid expensesTotal current assetsPlant and equipment, netTotal assetsLiabilities and Stockholders' EquityLiabilities:Current liabilities.Note payable, 10%Total liabilitiesStockholders' equity:Common stock, $75 par valueRetained earningsTotal stockholders' equityTotal liabilities and stockholders' equitySales (all on account)Cost of goods soldLydex CompanyComparative Balance SheetGross marginSelling and administrative expensesNet operating income.Interest expenseNet income before taxesIncome taxes (30%)Net incomeCommon dividendsNet income retainedBeginning retained earningsEnding retained earningsCurrent ratioAcid-test ratioAverage collection periodLydex CompanyComparative Income Statement and ReconciliationThis YearAverage sale periodReturn on assetsDebt-to-equity ratioTimes interest earned ratio.Price-earnings ratioProblem 14-15 Part 3 (Algo)a. Working capitalb. The current ratioThe acid-test ratiod. The average collection periode. The average sale periodThe operating cycleg. The total asset tumover2.41.19.3%40 days.60 days0.75.910This YearThis Year$ 960,0002,700,0003,600,000260,0007,520,0009,520,000$ 17,040,000daysdaysdays$ 4,010,0003,660,0007,670,0007,500,0001,870,0009,370,000$ 17,040,000$ 15,860,00012,688,0003,172,0001,006,000To begin your assignment you gather the following financial data and ratios that are typical of companies in LydexCompany's industry:2,166,000366,0001,800,000540,0001,260,000400,000860,0001,010,000$ 1,870,000Last YearLast Year$ 1,200,000300,0001,800,0002,000,000200,0005,500,0009,050,000$ 14,550,000daysdaysdays$ 2,980,0003,060,0006,040,0003. You decide, finally, to assess the company's liquidity and asset management. For both this year and last year, compute:a. Working capital.b. The current ratio. (Round your final answers to 2 decimal places.)c. The acid-test ratio. (Round your final answers to 2 decimal places.)d. The average collection period. (The accounts receivable at the beginning of last year totaled $1,670,000.) (Use 365 days in a year.Round your intermediate calculations and final answers to 2 decimal place.)e. The average sale period. (The inventory at the beginning of last year totaled $2,030,000.) (Use 365 days in a year. Round yourintermediate calculations and final answers to 2 decimal place.)f. The operating cycle. (Round your intermediate calculations and final answers to 2 decimal place.)g. The total asset turnover. (The total assets at the beginning of last year totaled $13,070,000.) (Round your final answers to 2 decimalplaces.)7,500,0001,010,0008,510,000$14,550,000Last Year$ 13,580,00010,185,0003,395,0001,604,0001,791,000306,0001,485,000445,5001,039,500519,750519,750490,250$ 1,010,000

The ratio is the technique used by the prospective investor or an individual or strategist to read…

Required information Problem 14-15 (Algo) Comprehensive Ratio Analysis [LO14-2, LO14-3, LO14-4, LO14-5, LO14-6] [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: Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $75 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Sales (all on account) Cost of goods sold Lydex Company Comparative Balance Sheet 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. Lydex Company Comparative Income Statement and Reconciliation This Year 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. Problem 14-15 Part 3 (Algo) a. Working capital b. The current ratio 2.4 1.1 c. The acid-test ratio d. The average collection period e. The average sale period f. The operating cycle g. The total asset tumover 9.3% 0.7 40 days. 60 days 5.9 10 This Year $ 960,000 2,700,000 3,600,000 260,000 This Year 7,520,000 9,520,000 $ 17,040,000 $ 4,010,000 3,660,000 7,670,000 days days days 7,500,000 1,870,000 9,370,000 $ 17,040,000 $15,860,000 12,688,000 3,172,000 1,006,000 2,166,000 366,000 0 1,800,000 540,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex. Company's industry: Last Year $ 1,200,000 300,000 1,800,000 2,000,000 200,000 5,500,000 9,050,000 $ 14,550,000 Last Year $ 2,980,000 3,060,000 6,040,000 7,500,000 1,010,000 8,510,000 $ 14,550,000 Last Year $ 13,580,000 10,185,000 3,395,000 1,604,000 days days days 1,260,000 400,000 860,000 1,010,000 $ 1,870,000 $ 1,010,000 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and last year, compute: a. Working capital. b. The current ratio. (Round your final answers to 2 decimal places.) 1,791,000 306,000 1,485,000 445,500 c. The acid-test ratio. (Round your final answers to 2 decimal places.) d. The average collection period. (The accounts receivable at the beginning of last year totaled $1,670,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) e. The average sale period. (The inventory at the beginning of last year totaled $2,030,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) 1,039,500 519,750 f. The operating cycle. (Round your intermediate calculations and final answers to 2 decimal place.) g. The total asset turnover. (The total assets at the beginning of last year totaled $13,070,000.) (Round your final answers to 2 decimal places.) 519,750 490,250

Required information Problem 14-15 (Algo) Comprehensive Ratio Analysis [LO14-2, LO14-3, LO14-4, LO14-5, LO14-6] [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: Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $75 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Sales (all on account) Cost of goods sold Lydex Company Comparative Balance Sheet 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. Lydex Company Comparative Income Statement and Reconciliation This Year 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. Problem 14-15 Part 3 (Algo) a. Working capital b. The current ratio 2.4 1.1 c. The acid-test ratio d. The average collection period e. The average sale period f. The operating cycle g. The total asset tumover 9.3% 0.7 40 days. 60 days 5.9 10 This Year $ 960,000 2,700,000 3,600,000 260,000 This Year 7,520,000 9,520,000 $ 17,040,000 $ 4,010,000 3,660,000 7,670,000 days days days 7,500,000 1,870,000 9,370,000 $ 17,040,000 $15,860,000 12,688,000 3,172,000 1,006,000 2,166,000 366,000 0 1,800,000 540,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex. Company's industry: Last Year $ 1,200,000 300,000 1,800,000 2,000,000 200,000 5,500,000 9,050,000 $ 14,550,000 Last Year $ 2,980,000 3,060,000 6,040,000 7,500,000 1,010,000 8,510,000 $ 14,550,000 Last Year $ 13,580,000 10,185,000 3,395,000 1,604,000 days days days 1,260,000 400,000 860,000 1,010,000 $ 1,870,000 $ 1,010,000 3. You decide, finally, to assess the company's liquidity and asset management. For both this year and last year, compute: a. Working capital. b. The current ratio. (Round your final answers to 2 decimal places.) 1,791,000 306,000 1,485,000 445,500 c. The acid-test ratio. (Round your final answers to 2 decimal places.) d. The average collection period. (The accounts receivable at the beginning of last year totaled $1,670,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) e. The average sale period. (The inventory at the beginning of last year totaled $2,030,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.) 1,039,500 519,750 f. The operating cycle. (Round your intermediate calculations and final answers to 2 decimal place.) g. The total asset turnover. (The total assets at the beginning of last year totaled $13,070,000.) (Round your final answers to 2 decimal places.) 519,750 490,250

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

9th Edition

ISBN:9781305635937

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter4: Analysis Of Financial Statements

Section: Chapter Questions

Problem 4DQ

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