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 970,000 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 $26.50. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Assets | ||
Current assets: | ||
Cash | $ 3,302 | $ 4,230 |
Accounts receivable, net | 16,100 | 9,100 |
Inventory | 10,550 | 8,880 |
Prepaid expenses | 1,970 | 2,440 |
Total current assets | 31,922 | 24,650 |
Property and equipment: | ||
Land | 7,700 | 7,700 |
Buildings and equipment, net | 20,900 | 20,700 |
Total property and equipment | 28,600 | 28,400 |
Total assets | $ 60,522 | $ 53,050 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Accounts payable | $ 11,200 | $ 9,150 |
Accrued liabilities | 940 | 1,550 |
Notes payable, short term | 470 | 470 |
Total current liabilities | 12,610 | 11,170 |
Long-term liabilities: | ||
Bonds payable | 7,500 | 7,500 |
Total liabilities | 20,110 | 18,670 |
Stockholders' equity: | ||
Common stock | 970 | 970 |
Additional paid-in capital | 5,050 | 5,050 |
Total paid-in capital | 6,020 | 6,020 |
Retained earnings | 34,392 | 28,360 |
Total stockholders' equity | 40,412 | 34,380 |
Total liabilities and stockholders' equity | $ 60,522 | $ 53,050 |
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Sales | $ 96,000 | $ 91,000 |
Cost of goods sold | 60,500 | 56,500 |
Gross margin | 35,500 | 34,500 |
Selling and administrative expenses: | ||
Selling expenses | 10,200 | 9,700 |
Administrative expenses | 13,700 | 12,700 |
Total selling and administrative expenses | 23,900 | 22,400 |
Net operating income | 11,600 | 12,100 |
Interest expense | 900 | 900 |
Net income before taxes | 10,700 | 11,200 |
Income taxes | 4,280 | 4,480 |
Net income | 6,420 | 6,720 |
Dividends to common stockholders | 388 | 776 |
Net income added to retained earnings | 6,032 | 5,944 |
Beginning retained earnings | 28,360 | 22,416 |
Ending retained earnings | $ 34,392 | $ 28,360 |
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.)
\begin{tabular}{|l|l|l|} \hline 1. Earnings per share & & \\ \hline 2. Price-earnings ratio & & \\ \hline 3. Dividend payout ratio & & % \\ \hline 4. Dividend yield ratio & & % \\ \hline 5. Book value per share & & \\ \hline \end{tabular}
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