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 910,000 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 the year was $23.50. All of the companys sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,506 $ 1,720 Accounts receivable, net 15,500 10,300 Inventory 10,250 8,640 Prepaid expenses 1,910 2,320 Total current assets 29,166 22,980 Property and equipment: Land 7,100 7,100 Buildings and equipment, net 20,300 20,100 Total property and equipment 27,400 27,200 Total assets $ 56,566 $ 50,180 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 10,600 $ 8,850 Accrued liabilities 820 1,250 Notes payable, short term 410 410 Total current liabilities 11,830 10,510 Long-term liabilities: Bonds payable 6,250 6,250 Total liabilities 18,080 16,760 Stockholders' equity: Common stock 910 910 Additional paid-in capital 4,750 4,750 Total paid-in capital 5,660 5,660 Retained earnings 32,826 27,760 Total stockholders' equity 38,486 33,420 Total liabilities and stockholders' equity $ 56,566 $ 50,180 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 90,000 $ 85,000 Cost of goods sold 57,500 53,500 Gross margin 32,500 31,500 Selling and administrative expenses: Selling expenses 9,600 9,100 Administrative expenses 13,100 12,100 Total selling and administrative expenses 22,700 21,200 Net operating income 9,800 10,300 Interest expense 750 750 Net income before taxes 9,050 9,550 Income taxes 3,620 3,820 Net income 5,430 5,730 Dividends to common stockholders 364 728 Net income added to retained earnings 5,066 5,002 Beginning retained earnings 27,760 22,758 Ending retained earnings $ 32,826 $ 27,760 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 answer to 2 decimal places.) 5. Book value per share. (Round your answer to 2 decimal places.)
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