Lydex Company Comparative Income Statement and Reconciliation
This Year
Last Year
Sales (all on account)
$
15,860,000
$
13,580,000
Cost of goods sold
12,688,000
10,185,000
Gross margin
3,172,000
3,395,000
Selling and administrative expenses
1,006,000
1,604,000
Net operating income
2,166,000
1,791,000
Interest expense
366,000
306,000
Net income before taxes
1,800,000
1,485,000
Income taxes (30%)
540,000
445,500
Net income
1,260,000
1,039,500
Common dividends
400,000
519,750
Net income retained
860,000
519,750
Beginning retained earnings
1,010,000
490,250
Ending retained earnings
$
1,870,000
$
1,010,000
To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Companys industry:
Current ratio
2.4
Acid-test ratio
1.1
Average collection period
40
days
Average sale period
60
days
Return on assets
9.3
%
Debt-to-equity ratio
0.7
Times interest earned ratio
5.9
Price-earnings ratio
10
You decide next to assess the companys stock market performance, Assume that Lydexs stock price at the end of this year is $94 per share and that at the end of last year it was $62, 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)
The earnings per share.
The dividend yield ratio.
The dividend payout ratio.
The price-earnings ratio.
The book value per share of common stock.
Answer & Explanation
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