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 810,000 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 $18.50. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Assets | ||
Current assets: | ||
Cash | $ 2,546 | $ 2,770 |
Accounts receivable, net | 12,400 | 9,150 |
Inventory | 9,750 | 8,240 |
Prepaid expenses | 1,810 | 2,120 |
Total current assets | 26,506 | 22,280 |
Property and equipment: | ||
Land | 6,100 | 6,100 |
Buildings and equipment, net | 19,300 | 19,100 |
Total property and equipment | 25,400 | 25,200 |
Total assets | $ 51,906 | $ 47,480 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Accounts payable | $ 9,600 | $ 8,350 |
Accrued liabilities | 620 | 750 |
Notes payable, short term | 310 | 310 |
Total current liabilities | 10,530 | 9,410 |
Long-term liabilities: | ||
Bonds payable | 6,250 | 6,250 |
Total liabilities | 16,780 | 15,660 |
Stockholders' equity: | ||
Common stock | 810 | 810 |
Additional paid-in capital | 4,250 | 4,250 |
Total paid-in capital | 5,060 | 5,060 |
Retained earnings | 30,066 | 26,760 |
Total stockholders' equity | 35,126 | 31,820 |
Total liabilities and stockholders' equity | $ 51,906 | $ 47,480 |
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Sales | $ 80,000 | $ 75,000 |
Cost of goods sold | 52,500 | 48,500 |
Gross margin | 27,500 | 26,500 |
Selling and administrative expenses: | ||
Selling expenses | 8,600 | 8,100 |
Administrative expenses | 12,100 | 11,100 |
Total selling and administrative expenses | 20,700 | 19,200 |
Net operating income | 6,800 | 7,300 |
Interest expense | 750 | 750 |
Net income before taxes | 6,050 | 6,550 |
Income taxes | 2,420 | 2,620 |
Net income | 3,630 | 3,930 |
Dividends to common stockholders | 324 | 648 |
Net income added to retained earnings | 3,306 | 3,282 |
Beginning retained earnings | 26,760 | 23,478 |
Ending retained earnings | $ 30,066 | $ 26,760 |
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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