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 940,000 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 company’s common stock at the end of the year was $25. 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 | $ | 5,304 | $ | 5,350 | ||
Accounts receivable, net | 15,800 | 10,450 | ||||
Inventory | 10,400 | 8,760 | ||||
Prepaid expenses | 1,940 | 2,380 | ||||
Total current assets | 33,444 | 26,940 | ||||
Property and equipment: | ||||||
Land | 7,400 | 7,400 | ||||
Buildings and equipment, net | 20,600 | 20,400 | ||||
Total property and equipment | 28,000 | 27,800 | ||||
Total assets | $ | 61,444 | $ | 54,740 | ||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 10,900 | $ | 9,000 | ||
Accrued liabilities | 880 | 1,400 | ||||
Notes payable, short term | 440 | 440 | ||||
Total current liabilities | 12,220 | 10,840 | ||||
Long-term liabilities: | ||||||
Bonds payable | 10,000 | 10,000 | ||||
Total liabilities | 22,220 | 20,840 | ||||
Stockholders' equity: | ||||||
Common stock | 940 | 940 | ||||
Additional paid-in capital | 4,900 | 4,900 | ||||
Total paid-in capital | 5,840 | 5,840 | ||||
Retained earnings | 33,384 | 28,060 | ||||
Total stockholders' equity | 39,224 | 33,900 | ||||
Total liabilities and stockholders' equity | $ | 61,444 | $ | 54,740 | ||
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||||||
This Year | Last Year | |||||
Sales | $ | 93,000 | $ | 88,000 | ||
Cost of goods sold | 59,000 | 55,000 | ||||
Gross margin | 34,000 | 33,000 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 9,900 | 9,400 | ||||
Administrative expenses | 13,400 | 12,400 | ||||
Total selling and administrative expenses | 23,300 | 21,800 | ||||
Net operating income | 10,700 | 11,200 | ||||
Interest expense | 1,200 | 1,200 | ||||
Net income before taxes | 9,500 | 10,000 | ||||
Income taxes | 3,800 | 4,000 | ||||
Net income | 5,700 | 6,000 | ||||
Dividends to common stockholders | 376 | 752 | ||||
Net income added to retained earnings | 5,324 | 5,248 | ||||
Beginning retained earnings | 28,060 | 22,812 | ||||
Ending retained earnings | $ | 33,384 | $ | 28,060 | ||
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. (Round your answer to 2 decimal places.)
1 | Earnings per share | ? | |
2 | Price-earnings ratio | ? | |
3 | Dividentd payout ratio | ? | % |
4 | Dividend yield ratio | ? | % |
5 | Book value per share | ? |
Step by Step Solution
3.52 Rating (149 Votes )
There are 3 Steps involved in it
Step: 1
Answer 1 Earnings per share Net income Shares outst...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started