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 800,000 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 $18. 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 $ 1,280 $ 1,560 Accounts receivable, net 12,300 9,100 Inventory 9,700 8,200 Prepaid expenses 1,800 2,100 Total current assets 25,080 20,960 6,000 19,200 6,000 19,000 Property and equipment: Land Buildings and equipment, net Total property and equipment Total assets 25,200 25,000 $50,280 $45,960 $ 9,500 600 300 $ 8,300 700 300 10,400 9,300 5,000 5,000 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 Total paid-in capital Retained earnings Total stockholders' equity 15,400 14,300 800 4,200 800 4,200 5,000 29,880 5,000 26,660 34,880 31,660 Total liabilities and stockholders' equity $50,280 $45,960 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 79,000 $74,000 Cost of goods sold 52,000 48,000 Gross margin 27,000 26,000 Selling and administrative expenses: Selling expenses Administrative expenses 8,500 12,000 8,000 11,000 20,500 19,000 Total selling and administrative expenses Net operating income Interest expense 6,500 600 7,000 600 5,900 2,360 6,400 2,560 3,540 320 3,840 600 Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 3,220 26,660 3,240 23,420 $29,880 $ 26,660 Required: Compute the following financial data for this year: 1. Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) Gross margin percentage % 2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) Net profit margin percentage % 3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) Return on total assets % 4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) Return on equity %
