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 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 companys common stock at the end of this year was $20.50. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Assets | ||
Current assets: | ||
Cash | $ 1,810 | $ 710 |
Accounts receivable, net | 12,800 | 10,000 |
Inventory | 9,950 | 8,400 |
Prepaid expenses | 1,850 | 2,200 |
Total current assets | 26,410 | 21,310 |
Property and equipment: | ||
Land | 6,500 | 6,500 |
Buildings and equipment, net | 19,700 | 19,500 |
Total property and equipment | 26,200 | 26,000 |
Total assets | $ 52,610 | $ 47,310 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Accounts payable | $ 10,000 | $ 8,550 |
Accrued liabilities | 700 | 950 |
Notes payable, short term | 350 | 350 |
Total current liabilities | 11,050 | 9,850 |
Long-term liabilities: | ||
Bonds payable | 5,000 | 5,000 |
Total liabilities | 16,050 | 14,850 |
Stockholders' equity: | ||
Common stock | 850 | 850 |
Additional paid-in capital | 4,450 | 4,450 |
Total paid-in capital | 5,300 | 5,300 |
Retained earnings | 31,260 | 27,160 |
Total stockholders' equity | 36,560 | 32,460 |
Total liabilities and stockholders' equity | $ 52,610 | $ 47,310 |
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Sales | $ 84,000 | $ 79,000 |
Cost of goods sold | 54,500 | 50,500 |
Gross margin | 29,500 | 28,500 |
Selling and administrative expenses: | ||
Selling expenses | 9,000 | 8,500 |
Administrative expenses | 12,500 | 11,500 |
Total selling and administrative expenses | 21,500 | 20,000 |
Net operating income | 8,000 | 8,500 |
Interest expense | 600 | 600 |
Net income before taxes | 7,400 | 7,900 |
Income taxes | 2,960 | 3,160 |
Net income | 4,440 | 4,740 |
Dividends to common stockholders | 340 | 680 |
Net income added to retained earnings | 4,100 | 4,060 |
Beginning retained earnings | 27,160 | 23,100 |
Ending retained earnings | $ 31,260 | $ 27,160 |
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. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.)
4. Dividend yield ratio. (Round your intermediate calculations and final answer to 2 decimal places.)
5. Book value per share
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