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1B)
Rotorua Products, Ltd., of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company's current assets, current liabilities, and sales have been reported as follows over the last five years (Year 5 is the most recent year): Year 1 Year 5 $5,807,430 Year 2 Year 3 Year 4 $4,748,670 $4,570,810 $5,027,220 $5,514,260 Sales 91,774 $ 107,096 428,131 865,406 $ 95,987 451,755 834,939 Cash Accounts receivable, net Inventory 79,569 506,453 889,450 64,083 571,594 896,142 416,874 800,893 $1,309,541 $1,400,633 $1,382,681 $1,475,472 $1,531,819 Total current assets $ 318,367 $ 334,431 $ 404,719 $ 343,048 $ 325,722 Current liabilities Required: 1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) Year 2 Year 4 Year 5 Year 1 Year 3 Sales Current assets: Cash Accounts receivable Inventory Total current assets Current liabilities Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company's common stock at the end of the year was $21. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses $ 1,230 10,800 12,500 760 $ 1,380 7,700 11,200 690 20,970 Total current assets 25,290 Property and equipment: Land Buildings and equipment, net 9,200 40,678 9,200 50,436 Total property and equipment 59,636 49,878 $ 70,848 $84,926 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term $ 19,500 1,070 270 $ 18,800 730 270 20,840 19,800 Total current liabilities Long-term liabilities: Bonds payable 8,700 8,700 28,500 Total liabilities 29,540 Stockholders' equity: Common stock Additional paid-in capital 600 4,000 600 4,000 Total paid-in capital Retained earnings 4,600 50,786 4,600 37,748 Total stockholders' equity 55,386 42,348 Total liabilities and stockholders' equity $84,926 $ 70,848 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year $75,000 34,000 Last Year $ 65,000 36,000 Sales Cost of goods sold Gross margin 41,000 29,000 Selling and administrative expenses: Selling expenses Administrative expenses 10,100 6,600 11,200 6,800 Total selling and administrative expenses 18,000 16,700 Net operating income Interest expense 23,000 870 12,300 870 Net income before taxes Income taxes 11,430 4,572 22,130 8,852 Net income Dividends to common stockholders 13,278 240 6,858 450 Net income added to retained earnings Beginning retained earnings 6,408 31,340 13,038 37,748 $50,786 $ 37,748 Ending retained earnings Required: Compute the following financial data and ratios for this year: 1. Working capital. (Enter your answer in thousands) Working capital 2. Current ratio. (Round your answer to 2 decimal places.) Current ratio 3. Acid-test ratio. (Round your answer to 2 decimal places.) Acid-test ratio
