3 Exercise 14-4 (Algo) Financial Ratios for Debt Management [LO14-4) Comparative financial statements for Weller Corporation, a merchandising company, for the 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 bond payable 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 this year was $21. All of the company's sales are on account wlter Corporation Comparative Balance Sheet (dollars in thousands Assets Current assets Cash Accounts receivable, net Inventory Prepare expenses Total current assets Property and equipment: Land Buildings and equipeent, net Tetal property and equipeent Total assets Liabilities and Stockholders' Equity Current Liabilities Accounts payable Accrued Liabilities Notes payable, short tere Total current liabilities Long-term 11abilities: Bonds payable This Year Last Year $1,120 $1,768 10,500 13,408 11,400 600 25616 196978 510 45.570 9,200 43,600 54,776 100,398 $2,000 73.830 $ 38,000 1,000 $18,500 80 200 19,000 10,600 1,000 8,000 Check my work PM ha 27,000 27,688 2,000 2,000 4,000- 4,000 6,000 6,000 46,590 39,158 52,596 45,150 $ 80,390 $ 72,830 3 Total liabilities Stockholders' equity Common stock Additional paid-in capital Total paid-in capital Retained earnings 6 points Total stockholders equity) elfook Het Total Liabilities and stockholders' equity Comparative Income Statement and Reconciliation Weller Corporation (dollars in thousands) P Iferences Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net Income Dividends to common stockholders Net incone added to retained earnings Beginning retained earnings Ending retained earnings This Year $ 67,000 35,000 Last Year $ 65,000 33,000 32,000 32,000 11,400 10,100 7,000 6,000 10,400 10,100 13,600 15,900 800 800 12,800 5,120 7,680 15,100 6,040 9,060 240 450 7,440 39,150 8,610 30,540 $ 46,590 $39,150 Print ferences Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. (For all requirements, round your answers to 2 decimal places.) 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier