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 880,000 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 $22.00. All of the companys sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 3,508 $ 4,340 Accounts receivable, net 15,200 10,150 Inventory 10,100 8,520 Prepaid expenses 1,880 2,260 Total current assets 30,688 25,270 Property and equipment: Land 6,800 6,800 Buildings and equipment, net 20,000 19,800 Total property and equipment 26,800 26,600 Total assets $ 57,488 $ 51,870 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 10,300 $ 8,700 Accrued liabilities 760 1,100 Notes payable, short term 380 380 Total current liabilities 11,440 10,180 Long-term liabilities: Bonds payable 8,750 8,750 Total liabilities 20,190 18,930 Stockholders' equity: Common stock 880 880 Additional paid-in capital 4,600 4,600 Total paid-in capital 5,480 5,480 Retained earnings 31,818 27,460 Total stockholders' equity 37,298 32,940 Total liabilities and stockholders' equity $ 57,488 $ 51,870 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 87,000 $ 82,000 Cost of goods sold 56,000 52,000 Gross margin 31,000 30,000 Selling and administrative expenses: Selling expenses 9,300 8,800 Administrative expenses 12,800 11,800 Total selling and administrative expenses 22,100 20,600 Net operating income 8,900 9,400 Interest expense 1,050 1,050 Net income before taxes 7,850 8,350 Income taxes 3,140 3,340 Net income 4,710 5,010 Dividends to common stockholders 352 704 Net income added to retained earnings 4,358 4,306 Beginning retained earnings 27,460 23,154 Ending retained earnings $ 31,818 $ 27,460 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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