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 700,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, 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 the year was $28. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,140 9,000 12,300 620 23,060 $ 1,340 8,300 10,900 680 21,220 10,200 53,833 64,033 $87,093 10, 200 39, 811 50,011 $71,231 Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $19,000 1,070 290 20,360 $18,400 810 290 19,500 8,400 28,760 8,400 27,900 700 700 4,000 4,700 53,633 58,333 $87,093 4,000 4,700 38,631 43,331 $71,231 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $77,850 $65,000 Cost of goods sold 33,640 34,000 Gross margin 44,210 31,000 Selling and administrative expenses: Selling expenses 11,000 Administrative expenses 10, 200 6,900 6,600 Total selling and administrative expenses 17,900 16,800 Net operating income 26,310 14,200 Interest expense 840 840 Net income before taxes 25, 470 13,360 Income taxes 10,188 5,344 Net income 15, 282 Dividends to common stockholders 8,016 280 525 Net income added to retained earnings 15,002 7,491 Beginning retained earnings 38,631 31,140 Ending retained earnings $53,633 $38,631 Required: Compute the following financial data for this year: 1. Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.) 2. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 3. Inventory turnover. (Round your answer to 2 decimal places.) 4. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 5. Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.) 6. Total asset turnover. (Round your answer to 2 decimal places.) days 1. Accounts receivable turnover 2. Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle 6. Total asset turnover days days Exercise 14-5 Financial Ratios for Assessing Profitability [LO14-5) 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 850,000 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 the year was $20. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,810 12,800 9,950 350 26,410 $ 710 10,000 8,400 200 21,310 6,500 19,700 26,200 $52,610 6,500 19,500 26,000 $ 47,310 Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $10,000 700 350 11,050 $ 8,550 950 350 9,850 5,000 16,050 5,000 14,850 850 4,450 850 4,450 5,300 31,260 36,560 $52,610 27,160 32,460 $ 47,310 Last Year $ 79,000 50,500 28,500 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $ 84,000 Cost of goods sold 54,500 Gross margin 29,500 Selling and administrative expenses: Selling expenses 9,000 Administrative expenses 12,500 Total selling and administrative expenses 21,500 Net operating income 8,000 Interest expense 600 Net income before taxes 7,400 Income taxes 2,960 Net income 4,440 Dividends to common stockholders 340 Net income added to retained earnings 4,100 Beginning retained earnings 27,160 Ending retained earnings $31,260 8,500 11,500 20,000 8,500 600 7,900 3,160 4,740 680 4,060 23,100 $27,160 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).) % 1. Gross margin percentage 2. Net profit margin percentage % 3. Return on total assets % 4. Return on equity %