Chod Exercise 14-2 Financial Ratios for Assessing Liquidity (LO14-2] 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 700,000 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 the year was $20. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,130 10,300 12,400 760 24,590 $ 1,400 8.200 11,800 640 22,040 9,600 50,254 59,854 $84.444 9.600 38,957 48,557 $70,597 Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Land 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 $20.100 1,090 280 21,470 $19,300 850 280 20, 430 8,800 30270 0.800 29.230 700 4.000 4,700 49,474 54. 174 700 4.000 4,700 36,667 41,367 MacBook Air Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 76,000 $65,000 Cost of goods sold 35,000 36,000 Gross margin 41,000 29,000 Selling and administrative expenses: Selling expenses 10,600 10,600 Administrative expenses 7,300 6,600 Total selling and administrative expenses 17,900 17,200 Net operating income 23,100 11,800 Interest expense 880 880 Net income before taxes 22, 220 10,920 Income taxes 8,888 4,368 Net income 13,332 6,552 Dividends to common stockholders 525 525 Net income added to retained earnings 12,807 6,027 Beginning retained earnings 36,667 30, 640 Ending retained earnings $49, 474 $36,667 Required: Compute the following financial data and ratios for this year: S 1. Working capital. (Enter your answer in thousands.) 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio. (Round your answer to 2 decimal places.) 1. Working capital 2. Current ratio 3. Acid-test ratio