[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 Lydex Company Comparative Balance Sheet This Year Last Year $940,000 2,620,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $75 par value 3,580,000 250,000 7,390,000 9,480,000 $ 16,870,000 $ 1,180,000 300,000 1,720,000 2,300,000 190,000 5,690,000 9,030,000 $ 14,720,000 $ 3,990,000 3,660,000 7,650,000 7,500,000 $ 2,940,000 3,060,000 6,000,000 7,500,000 Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Lydex Company 1,720,000 9,220,000 1,220,000 8,720,000 $ 16,870,000 $ 14,720,000 Comparative Income Statement and Reconciliation 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 This Year $ 15,840,000 12,672,000 3,168,000 1,602,000 1,566,000 366,000 Last Year $ 13,380,000 10,035,000 3,345,000 1,596,000 1,749,000 306,000 1,443,000 1,200,000 360,000 432,900 840,000 1,010,100 340,000 505,050 500,000 505,050 1,220,000 714,950 $ 1,720,000 $ 1,220,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio Acid-test ratio 2.4 1.1 Average collection period 40 days Average sale period 60 days Return on assets 9.1% Debt-to-equity ratio 0.7 Times interest earned ratio 5.7 Price-earnings ratio 10 Problem 14-15 Part 2 (Algo) 2. You decide next to assess the company's stock market performance. Assume that Lydex's stock price at the end of this year is $90 per share and that at the end of last year it was $58. For both this year and last year, compute: (Round your "Percentage" answers to 1 decimal place and other intermediate and final answers to 2 decimal places.) a. The earnings per share. b. The dividend yield ratio. c. The dividend payout ratio. d. The price-earnings ratio. e. The book value per share of common stock. a. The earnings per share b. The dividend yield ratio c. The dividend payout ratio d. The price-earnings ratio e. The book value per share of common stock This Year % % Last Year % %

[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 Lydex Company Comparative Balance Sheet This Year Last Year $940,000 2,620,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $75 par value 3,580,000 250,000 7,390,000 9,480,000 $ 16,870,000 $ 1,180,000 300,000 1,720,000 2,300,000 190,000 5,690,000 9,030,000 $ 14,720,000 $ 3,990,000 3,660,000 7,650,000 7,500,000 $ 2,940,000 3,060,000 6,000,000 7,500,000 Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Lydex Company 1,720,000 9,220,000 1,220,000 8,720,000 $ 16,870,000 $ 14,720,000 Comparative Income Statement and Reconciliation 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 This Year $ 15,840,000 12,672,000 3,168,000 1,602,000 1,566,000 366,000 Last Year $ 13,380,000 10,035,000 3,345,000 1,596,000 1,749,000 306,000 1,443,000 1,200,000 360,000 432,900 840,000 1,010,100 340,000 505,050 500,000 505,050 1,220,000 714,950 $ 1,720,000 $ 1,220,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio Acid-test ratio 2.4 1.1 Average collection period 40 days Average sale period 60 days Return on assets 9.1% Debt-to-equity ratio 0.7 Times interest earned ratio 5.7 Price-earnings ratio 10 Problem 14-15 Part 2 (Algo) 2. You decide next to assess the company's stock market performance. Assume that Lydex's stock price at the end of this year is $90 per share and that at the end of last year it was $58. For both this year and last year, compute: (Round your "Percentage" answers to 1 decimal place and other intermediate and final answers to 2 decimal places.) a. The earnings per share. b. The dividend yield ratio. c. The dividend payout ratio. d. The price-earnings ratio. e. The book value per share of common stock. a. The earnings per share b. The dividend yield ratio c. The dividend payout ratio d. The price-earnings ratio e. The book value per share of common stock This Year % % Last Year % %

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 10P

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