Question
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
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 960,000 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 $26.00. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||
---|---|---|
This Year | Last Year | |
Assets | ||
Current assets: | ||
Cash | $ 2,036 | $ 3,020 |
Accounts receivable, net | 16,000 | 9,050 |
Inventory | 10,500 | 8,840 |
Prepaid expenses | 1,960 | 2,420 |
Total current assets | 30,496 | 23,330 |
Property and equipment: | ||
Land | 7,600 | 7,600 |
Buildings and equipment, net | 20,800 | 20,600 |
Total property and equipment | 28,400 | 28,200 |
Total assets | $ 58,896 | $ 51,530 |
Liabilities and Stockholders\' Equity | ||
Current liabilities: | ||
Accounts payable | $ 11,100 | $ 9,100 |
Accrued liabilities | 920 | 1,500 |
Notes payable, short term | 460 | 460 |
Total current liabilities | 12,480 | 11,060 |
Long-term liabilities: | ||
Bonds payable | 6,250 | 6,250 |
Total liabilities | 18,730 | 17,310 |
Stockholders\' equity: | ||
Common stock | 960 | 960 |
Additional paid-in capital | 5,000 | 5,000 |
Total paid-in capital | 5,960 | 5,960 |
Retained earnings | 34,206 | 28,260 |
Total stockholders\' equity | 40,166 | 34,220 |
Total liabilities and stockholders\' equity | $ 58,896 | $ 51,530 |
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||
---|---|---|
This Year | Last Year | |
Sales | $ 95,000 | $ 90,000 |
Cost of goods sold | 60,000 | 56,000 |
Gross margin | 35,000 | 34,000 |
Selling and administrative expenses: | ||
Selling expenses | 10,100 | 9,600 |
Administrative expenses | 13,600 | 12,600 |
Total selling and administrative expenses | 23,700 | 22,200 |
Net operating income | 11,300 | 11,800 |
Interest expense | 750 | 750 |
Net income before taxes | 10,550 | 11,050 |
Income taxes | 4,220 | 4,420 |
Net income | 6,330 | 6,630 |
Dividends to common stockholders | 384 | 768 |
Net income added to retained earnings | 5,946 | 5,862 |
Beginning retained earnings | 28,260 | 22,398 |
Ending retained earnings | $ 34,206 | $ 28,260 |
Required:
Compute the following financial data for this year:
1. Earnings per share. (Round your answer to 2 decimal places.)
2. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.)
3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.)
4. Dividend yield ratio. (Round your intermediate calculations and final answer to 2 decimal places.)
5. Book value per share. (Round your answer to 2 decimal places.)
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