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 870,000 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 company's common stock at the end of this year was $22. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) Assets This Year Last Year Current assets: Cash Accounts receivable, net $ 2,242 $ 3,130 Inventory 15,100 10,100 10,050 8,480 Prepaid expenses 1,870 2,240 Total current assets 29, 262 23,950 Property and equipment: Land 6,700 6,700 Buildings and equipment, net 19,900 19,700 Total property and equipment 26,600 26,400 Total assets $ 55,862 $ 50,350 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 10, 200 $ 8,650 Accrued liabilities 740 1,050 Notes payable, short term 370 370 Total current liabilities 11,310 10,070 Long-term liabilities: Bonds payable 7.500 7.500 Total liabilities 18,810 17,570 Stockholders' equity: 870 870 Common stock Additional paid-in capital 4,550 4,550 5,420 5,420 Total paid-in capital 31,632 27,360 Retained earnings 37,052 32,780 Total stockholders' equity $ 55,862 $ 50,350 Total liabilities and stockholders' equity Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Sales This Year Last Year Cost of goods sold $ 86,000 $ 81,800 Gross margin 55,500 51,500 Selling and administrative expenses: 30,500 29,500 Selling expenses Administrative expenses 9,200 8,700 12,700 11,700 Total selling and administrative expenses 21,900 20,400 Net operating income 8,600 9,100 Interest expense 900 900 Net income before taxes 7,700 8,200 Income taxes 3,080 3,280 Net income 4,620 4,920 Dividends to common stockholders 348 696 Net income added to retained earnings 4,272 4,224 Beginning retained earnings 27, 360 23, 136 Ending retained earnings $ 31,632 $ 27,360 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).) 2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 3. Return on total assets. (Round your percentage answer to 1 decimal place (ie., 0.1234 should be entered as 12.3).) 4. Return on equity. (Round your percentage answer to 2 decimal places (.e., 0.1234 should be entered as 12.34).) % % 1. Gross margin percentage 2. Net profit margin percentage 3. Return on total assets 4. Retum on equity % %
