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%. 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 $28. 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 $ 1,190 $ 1,350 9,900 12,100 650 8,100 11,500 660 23,840 21,610 Property and equipment: Land 10,900 10,900 Buildings and equipment, net 42,620 34,320 Total property and equipment 53,520 45,220 Total assets $77,360 $66,830 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 $19,900 $17,700 920 740 0 150 20,820 18,590 8,000 8,000 28,820 26,590 2,000 2,000 4,000 4,000 Total paid-in capital 6,000 6,000 Retained earnings 42,540 34,240 Total stockholders' equity 48,540 40,240 Total liabilities and stockholders' equity $77,360 $66,830 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $69,000 $65,000 Cost of goods sold 36,000 40,000 Gross margin 33,000 25,000 Selling and administrative expenses: Selling expenses 11,400 10,800 Administrative expenses 6,500 6,400 Total selling and administrative expenses 17,900 17,200 Net operating income 15,100 7,800 Interest expense 800 800 Net income before taxes 14,300 7,000 Income taxes 5,720 2,800 Net income 8,580 4,200 Dividends to common stockholders 280 700 Net income added to retained earnings 8,300 3,500 Beginning retained earnings 34,240 30,740 Ending retained earnings $42,540 $34,240 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.) Answer is complete but not entirely correct. Times interest earned 1. 15.13 x ratio 2. |Debt-to-equity ratio 0.66 3. Equity multiplier 1.66