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Common-Size Financial Statement: Lydex Example

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See attached file for data.

Lydex Company:

For both this year and last year:
1. Present the balance sheet in common-size format.
2. Present the income statement in common-size format down through net income.
3. Comment on the results of your analysis.

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Solution Summary

Solution provides steps necessary to create a common-size financial statement.

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1.The cost of goods sold is increased from the last year resulting in decrease in the gross profit ratio.

2. However, it was possible for the operating management of the company to reduce the operating expenses percentage to sales despite of the increase in the ...

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