5)

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 950,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, 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 companys common stock at the end of this year was $26. All of the companys sales are on account.

Weller Corporation Comparative Balance Sheet (dollars in thousands)
	This Year	Last Year
Assets
Current assets:
Cash	$ 770	$ 1,810
Accounts receivable, net	15,900	9,000
Inventory	10,450	8,800
Prepaid expenses	1,950	2,400
Total current assets	29,070	22,010
Property and equipment:
Land	7,500	7,500
Buildings and equipment, net	20,700	20,500
Total property and equipment	28,200	28,000
Total assets	$ 57,270	$ 50,010
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 11,000	$ 9,050
Accrued liabilities	900	1,450
Notes payable, short term	450	450
Total current liabilities	12,350	10,950
Long-term liabilities:
Bonds payable	5,000	5,000
Total liabilities	17,350	15,950
Stockholders' equity:
Common stock	950	950
Additional paid-in capital	4,950	4,950
Total paid-in capital	5,900	5,900
Retained earnings	34,020	28,160
Total stockholders' equity	39,920	34,060
Total liabilities and stockholders' equity	$ 57,270	$ 50,010

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year	Last Year
Sales	$ 94,000	$ 89,000
Cost of goods sold	59,500	55,500
Gross margin	34,500	33,500
Selling and administrative expenses:
Selling expenses	10,000	9,500
Administrative expenses	13,500	12,500
Total selling and administrative expenses	23,500	22,000
Net operating income	11,000	11,500
Interest expense	600	600
Net income before taxes	10,400	10,900
Income taxes	4,160	4,360
Net income	6,240	6,540
Dividends to common stockholders	380	760
Net income added to retained earnings	5,860	5,780
Beginning retained earnings	28,160	22,380
Ending retained earnings	$ 34,020	$ 28,160

Required:

Compute the following financial data for this year:

1. Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)