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 940,000 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 company's common stock at the end of this year was $25. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 5,304 $ 5,350 Accounts receivable, net 15,800 10,450 Inventory 10,400 8,760 Prepaid expenses 1,940 2,380 Total current assets 33,444 26,940 Property and equipment: Land 7,400 7,400 Buildings and equipment, net 20,600 20,400 Total property and equipment 28,000 27,800 Total assets $61,444 $54,740 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $10.900 $ 9,000 Accrued liabilities 880 1,400 Notes payable, short term 440 Total current liabilities 12,220 10,840 Long-term liabilities: Bonds payable 10,000 10,000 Total liabilities 22,220 20,840 Stockholders' equity: Common stock 940 940 Additional paid-in capital 4,900 4,900 Total paid-in capital 5,840 5,840 Retained earnings 33,384 28,060 Total stockholders' equity 39,224 33,900 Total liabilities and stockholders' equity $61,444 $54,740 440 Last Year $88,000 55,000 33,000 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $93,000 Cost of goods sold 59,000 Gross margin 34,000 Selling and administrative expenses: Selling expenses 9,900 Administrative expenses 13,400 Total selling and administrative expenses 23,300 Net operating income 10,700 Interest expense 1,200 Net income before taxes 9,500 Income taxes 3,800 Net income 5,700 Dividends to common stockholders 376 Net income added to retained earnings 5,324 Beginning retained eamings 28,060 Ending retained earnings $33,384 9,400 12,400 21,800 11,200 1,200 10,000 4,000 6,000 752 5,248 22,812 $28,060 Required: Compute the following financial data for this year: 1. Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) Answer is complete but not entirely correct. 1 2. Gross margin percentage Net profit margin percentage Return on total assets Return on equity 36.6 % 6.1 % 9.8 % % 14.53 % 3. 4
