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 870,000 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 $21.50. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Assets | ||
Current assets: | ||
Cash | $ 2,242 | $ 3,130 |
Accounts receivable, net | 15,100 | 10,100 |
Inventory | 10,050 | 8,480 |
Prepaid expenses | 1,870 | 2,240 |
Total current assets | 29,262 | 23,950 |
Property and equipment: | ||
Land | 6,700 | 6,700 |
Buildings and equipment, net | 19,900 | 19,700 |
Total property and equipment | 26,600 | 26,400 |
Total assets | $ 55,862 | $ 50,350 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Accounts payable | $ 10,200 | $ 8,650 |
Accrued liabilities | 740 | 1,050 |
Notes payable, short term | 370 | 370 |
Total current liabilities | 11,310 | 10,070 |
Long-term liabilities: | ||
Bonds payable | 7,500 | 7,500 |
Total liabilities | 18,810 | 17,570 |
Stockholders' equity: | ||
Common stock | 870 | 870 |
Additional paid-in capital | 4,550 | 4,550 |
Total paid-in capital | 5,420 | 5,420 |
Retained earnings | 31,632 | 27,360 |
Total stockholders' equity | 37,052 | 32,780 |
Total liabilities and stockholders' equity | $ 55,862 | $ 50,350 |
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Sales | $ 86,000 | $ 81,000 |
Cost of goods sold | 55,500 | 51,500 |
Gross margin | 30,500 | 29,500 |
Selling and administrative expenses: | ||
Selling expenses | 9,200 | 8,700 |
Administrative expenses | 12,700 | 11,700 |
Total selling and administrative expenses | 21,900 | 20,400 |
Net operating income | 8,600 | 9,100 |
Interest expense | 900 | 900 |
Net income before taxes | 7,700 | 8,200 |
Income taxes | 3,080 | 3,280 |
Net income | 4,620 | 4,920 |
Dividends to common stockholders | 348 | 696 |
Net income added to retained earnings | 4,272 | 4,224 |
Beginning retained earnings | 27,360 | 23,136 |
Ending retained earnings | $ 31,632 | $ 27,360 |
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.)
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