5 Exercise 16-5 (Algo) Financial Ratios for Assessing Profitability (L016-5] 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 850,000 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 company's common stock at the end of this year was $20. All of the company's sales are on account. 0.8 points Skipped Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year eBook Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: $ 1,810 12,800 9,950 1,850 26,410 $ 710 10,000 8,400 2,200 21,310 References Land 6,500 6,500 19,700 26,200 $52,610 19,500 26,000 $47,310 $10,000 700 350 11,050 $ 8,550 950 350 9,850 Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 5,000 16,050 5,000 14,850 850 4,450 5,300 31,260 36,560 $52,610 850 4.450 5,300 27,160 32,460 $47,310 Last Year $79,000 50,500 28,500 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $84,000 Cost of goods sold 54,500 Gross margin 29,500 Selling and administrative expenses: Selling expenses 9,000 Administrative expenses 12,500 Total selling and administrative expenses 21,500 Net operating income 8,000 Interest expense 600 Net income before taxes 7,400 Income taxes 2,960 Net income 4,440 Dividends to common stockholders 340 Net income added to retained earnings 4,100 Beginning retained earnings 27,160 Ending retained earnings $31,260 8,500 11,500 20,000 8,500 600 7,900 3,160 4,740 680 4,060 23,100 $27,160 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 (1.e., 0.1234 should be entered as 12.3).) 4. Return on equity. (Round your percentage answer to 2 decimal places (l.e., 0.1234 should be entered as 12.34).) % % 1. Gross margin percentage 2. Net profit margin percentage 3. Return on total assets 4. Return on equity % %