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 $22.00. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) This YearLast YearAssets Current assets: Cash$ 3,508$ 4,340Accounts receivable, net15,20010,150Inventory10,1008,520Prepaid expenses1,8802,260Total current assets30,68825,270Property and equipment: Land6,8006,800Buildings and equipment, net20,00019,800Total property and equipment26,80026,600Total assets$ 57,488$ 51,870Liabilities and Stockholders' Equity Current liabilities: Accounts payable$ 10,300$ 8,700Accrued liabilities7601,100Notes payable, short term380380Total current liabilities11,44010,180Long-term liabilities: Bonds payable8,7508,750Total liabilities20,19018,930Stockholders' equity: Common stock880880Additional paid-in capital4,6004,600Total paid-in capital5,4805,480Retained earnings31,81827,460Total stockholders' equity37,29832,940Total liabilities and stockholders' equity$ 57,488$ 51,870
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This YearLast YearSales$ 87,000$ 82,000Cost of goods sold56,00052,000Gross margin31,00030,000Selling and administrative expenses: Selling expenses9,3008,800Administrative expenses12,80011,800Total selling and administrative expenses22,10020,600Net operating income8,9009,400Interest expense1,0501,050Net income before taxes7,8508,350Income taxes3,1403,340Net income4,7105,010Dividends to common stockholders352704Net income added to retained earnings4,3584,306Beginning retained earnings27,46023,154Ending 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.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started