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 600,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the companys common stock at the end of the year was $20. All of the companys sales are on account.

Weller Corporation Comparative Balance Sheet (dollars in thousands)
	This Year			Last Year
Assets
Current assets:
Cash	$	1,190		$	1,400
Accounts receivable, net		10,500			6,700
Inventory		12,400			10,900
Prepaid expenses		700			560
Total current assets		24,790			19,560
Property and equipment:
Land		9,500			9,500
Buildings and equipment, net		49,525			39,684
Total property and equipment		59,025			49,184
Total assets	$	83,815		$	68,744
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	19,000		$	18,200
Accrued liabilities		1,060			880
Notes payable, short term		220			220
Total current liabilities		20,280			19,300
Long-term liabilities:
Bonds payable		8,100			8,100
Total liabilities		28,380			27,400
Stockholders' equity:
Common stock		600			600
Additional paid-in capital		4,000			4,000
Total paid-in capital		4,600			4,600
Retained earnings		50,835			36,744
Total stockholders' equity		55,435			41,344
Total liabilities and stockholders' equity	$	83,815		$	68,744

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year			Last Year
Sales	$	80,840		$	66,000
Cost of goods sold		38,445			39,000
Gross margin		42,395			27,000
Selling and administrative expenses:
Selling expenses		10,700			10,300
Administrative expenses		7,000			6,300
Total selling and administrative expenses		17,700			16,600
Net operating income		24,695			10,400
Interest expense		810			810
Net income before taxes		23,885			9,590
Income taxes		9,554			3,836
Net income		14,331			5,754
Dividends to common stockholders		240			450
Net income added to retained earnings		14,091			5,304
Beginning retained earnings		36,744			31,440
Ending retained earnings	$	50,835		$	36,744

Required:

Compute the following financial data for this year:

5.	Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.)

6.	Total asset turnover. (Round your answer to 2 decimal places.)

rev: 08_11_2016_QC_CS-57088, 11_29_2016_QC_CS-71125; Brewer 7e Rechecks 2017-09-30, 12_06_2017_QC_CS-111369

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WorksheetDifficulty: 1 EasyLearning Objective: 13-03 Compute and interpret financial ratios that managers use for asset management purposes.

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