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 bonds, which were sold at their face value, was 10%. 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 $27. All of the companys sales are on account.

Weller Corporation Comparative Balance Sheet (dollars in thousands)

This YearLast Year

Assets

Current assets:

Cash$1,140 $1,290

Accounts receivable, net 10,500 6,900

Inventory 12,000 11,000

Prepaid expenses 770 640

Total current assets 24,410 19,830

Property and equipment:

Land 10,800 10,800

Buildings and equipment, net 43,540 38,840

Total property and equipment 54,340 49,640

Total assets$78,750 $69,470

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable$19,700 $17,800

Accrued liabilities 1,010 820

Notes payable, short term 0 120

Total current liabilities 20,710 18,740

Long-term liabilities:

Bonds payable 8,500 8,500

Total liabilities 29,210 27,240

Stockholders' equity:

Common stock 2,000 2,000

Additional paid-in capital 4,000 4,000

Total paid-in capital 6,000 6,000

Retained earnings 43,540 36,230

Total stockholders' equity 49,540 42,230

Total liabilities and stockholders' equity$78,750 $69,470

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)

This YearLast Year

Sales$68,000 $66,000

Cost of goods sold 36,000 38,000

Gross margin 32,000 28,000

Selling and administrative expenses:

Selling expenses 11,200 10,600

Administrative expenses 7,300 6,400

Total selling and administrative expenses 18,500 17,000

Net operating income 13,500 11,000

Interest expense 850 850

Net income before taxes 12,650 10,150

Income taxes 5,060 4,060

Net income 7,590 6,090

Dividends to common stockholders 280 700

Net income added to retained earnings 7,310 5,390

Beginning retained earnings 36,230 30,840

Ending retained earnings$43,540 $36,230

Required:

Compute the following financial ratios for this year:

1.Times interest earned ratio. (Round your answer to 1 decimal place.)

2.Debt-to-equity ratio. (Round your answer to 2 decimal places.)

3.Equity multiplier. (Round your answer to 2 decimal places.)