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 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 companys common stock at the end of the year was $25.00. All of the companys 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 answer to 2 decimal places.)
5. Book value per share. (Round your answer to 2 decimal places.)
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