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 800,000 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 $18. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: 1,280 1,560 9,100 8,200 2,100 25,08020,960 Cash Accounts receivable, net Inventory Prepaid expenses 12,300 9,700 1,800 Total current assets Property and equipment: 6,000 Land 6,000 19,20019,000 25,200 25 1000 Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders Equity Current liabilities: $50,280 $45,960 Accounts payable $ 9,500 8,300 700 300 9,300 Accrued liabilities 600 300 10,400 Notes payable, short term Total Long-term liabilities: current liabilities 5,000 15,400 5,000 14,300 Bonds payable Total liabilities Stockholders' equity: Common stock 800 4,2004,200 5,000 26.660 34,88031 1600 $50,280 45,960 800 Additional paid-in capital Total paid-in capital Retained earnings Total stockholders'equity Total liabilities and stockholders' equity 5,000 29,880 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales Cost of goods sold Gross margin Selling and administrative expenses $79,000 74,000 52,000 48,000 200026,000 8,000 11.000 19,000 7,000 600 6,400 2,560 3,840 600 3,240 26,660 23/420 $29,880 $26,660 Selling expenses 8,500 12,000 20,500 6,500 600 5,900 2,360 3,540 320 3,220 Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 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., 01234 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. 34.2 O 190 Gross margin percentage Net profit margin 4.5 % 2. ercentage Return on total assets Return on eauitv 13.8 11.25 % 4
