Question
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
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 960,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the companys common stock at the end of the year was $26. All of the companys sales are on account. |
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||||||
This Year | Last Year | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 2,036 | $ | 3,020 | ||
Accounts receivable, net | 16,000 | 9,050 | ||||
Inventory | 10,500 | 8,840 | ||||
Prepaid expenses | 1,960 | 2,420 | ||||
Total current assets | 30,496 | 23,330 | ||||
Property and equipment: | ||||||
Land | 7,600 | 7,600 | ||||
Buildings and equipment, net | 20,800 | 20,600 | ||||
Total property and equipment | 28,400 | 28,200 | ||||
Total assets | $ | 58,896 | $ | 51,530 | ||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 11,100 | $ | 9,100 | ||
Accrued liabilities | 920 | 1,500 | ||||
Notes payable, short term | 460 | 460 | ||||
Total current liabilities | 12,480 | 11,060 | ||||
Long-term liabilities: | ||||||
Bonds payable | 6,250 | 6,250 | ||||
Total liabilities | 18,730 | 17,310 | ||||
Stockholders' equity: | ||||||
Common stock | 960 | 960 | ||||
Additional paid-in capital | 5,000 | 5,000 | ||||
Total paid-in capital | 5,960 | 5,960 | ||||
Retained earnings | 34,206 | 28,260 | ||||
Total stockholders' equity | 40,166 | 34,220 | ||||
Total liabilities and stockholders' equity | $ | 58,896 | $ | 51,530 | ||
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||||||
This Year | Last Year | |||||
Sales | $ | 95,000 | $ | 90,000 | ||
Cost of goods sold | 60,000 | 56,000 | ||||
Gross margin | 35,000 | 34,000 | ||||
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Selling and administrative expenses: | ||||||
Selling expenses | 10,100 | 9,600 | ||||
Administrative expenses | 13,600 | 12,600 | ||||
Total selling and administrative expenses | 23,700 | 22,200 | ||||
Net operating income | 11,300 | 11,800 | ||||
Interest expense | 750 | 750 | ||||
Net income before taxes | 10,550 | 11,050 | ||||
Income taxes | 4,220 | 4,420 | ||||
Net income | 6,330 | 6,630 | ||||
Dividends to common stockholders | 384 | 720 | ||||
Net income added to retained earnings | 5,946 | 5,910 | ||||
Beginning retained earnings | 28,260 | 22,350 | ||||
Ending retained earnings | $ | 34,206 | $ | 28,260 | ||
Required: |
Compute the following financial data for this year: |
1. | Earnings per share. (Round your answer to 2 decimal places.) |
2. | Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.) |
3. | A.Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.) |
B. | Dividend yield ratio. (Round your intermediate calculations and final answer to 2 decimal places.) |
C. | Book value per share. (Round your answer to 2 decimal places.) |
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