Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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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 500,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%. 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 $20. 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 Accounts receivable, net Inventory Prepaid expenses Total current assets $1,230 10,900 12,000 $ 1,300 6,700 11,800 600 570 24,738 20,370 Property and equipment: Land 10,300 10,300 Buildings and equipment, net 44,928 48,844 Total property and equipment 55,228 51,144 Total assets $79.958 $71,514 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $19,000 $17,900 Accrued liabilities 980 888 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 e 238 19,988 19,010 9,108 9,100 29,088 28,110 2,000 2,000 4,000 4,000 6,000 6,000 Retained earnings 44,878 37,404 Total stockholders' equity 58,878 43,464 Total liabilities and stockholders' equity $79,958 $71,514 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $68,800 $66,000 Cost of goods sold 36,000 37,000 Gross margin 32,000 29,000 Selling and administrative expenses: Selling expenses 11,300 10,100 Administrative expenses 7,000 6,300 Total selling and administrative expenses 18,300 16,400 Net operating income 13,700 12,600 Interest expense 918 910 Net income before taxes 12,790 11,690 Income taxes 5,116 4,676 Net income 7,674 7,014 Dividends to common stockholders 200 250 Net income added to retained earnings 7,474 6,764 Beginning retained earnings 37,404 38,648 Ending retained earnings $44,878 $37,404 Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. (For all requirements, round your answers to 2 decimal places.) 1. 2. 3. Times interest earned ratio Debt-to-equity ratio Equity multiplier 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 500,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%. 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 $20. 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 Accounts receivable, net Inventory Prepaid expenses Total current assets $1,230 10,900 12,000 $ 1,300 6,700 11,800 600 570 24,738 20,370 Property and equipment: Land 10,300 10,300 Buildings and equipment, net 44,928 48,844 Total property and equipment 55,228 51,144 Total assets $79.958 $71,514 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $19,000 $17,900 Accrued liabilities 980 888 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 e 238 19,988 19,010 9,108 9,100 29,088 28,110 2,000 2,000 4,000 4,000 6,000 6,000 Retained earnings 44,878 37,404 Total stockholders' equity 58,878 43,464 Total liabilities and stockholders' equity $79,958 $71,514 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $68,800 $66,000 Cost of goods sold 36,000 37,000 Gross margin 32,000 29,000 Selling and administrative expenses: Selling expenses 11,300 10,100 Administrative expenses 7,000 6,300 Total selling and administrative expenses 18,300 16,400 Net operating income 13,700 12,600 Interest expense 918 910 Net income before taxes 12,790 11,690 Income taxes 5,116 4,676 Net income 7,674 7,014 Dividends to common stockholders 200 250 Net income added to retained earnings 7,474 6,764 Beginning retained earnings 37,404 38,648 Ending retained earnings $44,878 $37,404 Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. (For all requirements, round your answers to 2 decimal places.) 1. 2. 3. Times interest earned ratio Debt-to-equity ratio Equity multiplier
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