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 500,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $075 last year and $0.40 this year. The market value of the company's common stock at the end of the year was $20. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $1,150 9,200 13,800 770 24.950 5 1,250 6,70 12,100 530 20.580 45,115 54,685 9,500 44815 54,315 $74,95 Assets Current assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipent Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued liabilities Notes payable, short term Total current abilities Long-term liabilities: Bonde payable Total liabilities Stockholders' equity: Common stock Additional paid in capital Total paid.in capital Retained earnings hatut $19,500 1,030 $18,500 260 19.550 90, 530 9,000 29.530 2.000 6,000 44105 KATAS 2,000 4.000 6.000 40, 145 165 20,530 19,550 9,000 29,530 9,000 28,550 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 Total liabilities and stockholders' equity 2,000 4,000 6,000 44,105 50, 105 $ 79,635 2,000 4,000 6,000 40, 345 46,345 $74,895 Last Year $65,000 32,000 33,000 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $66,000 Cost of goods sold 41,000 Gross margin 25,000 Selling and administrative expenses: Selling expenses 11,100 Administrative expenses 6,400 Total selling and administrative expenses 17,500 Net operating income 7,500 Interest expense 900 Net income before taxes 6,600 Income taxes 2,640 Net income 3,960 Dividends to common stockholders 200 Net income added to retained earnings 3,760 Beginning retained earnings 40, 345 Ending retained earnings $44,105 10,300 6,000 16,300 16,700 900 15,800 6,320 9,480 375 9,105 31, 240 $40,345 Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. (For all requirements, round your answers to 2 decimal places.) 1. 2. Times interest earned ratio Debt-to-equity ratio Equity multiplier 3
