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 880,000 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 $22. 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 Accounts receivable, net Inventory Prepaid expenses $ 3,508 15,200 10,100 1,880 $ 4,340 10,150 8,520 2,260 Total current assets 30,688 25,270 Property and equipment: Land Buildings and equipment, net 6,800 20,000 6,800 19,800 Total property and equipment 26,800 26,600 Total assets $57,488 $ 51,870 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term $10,300 760 380 $ 8,700 1,100 380 11,440 10,180 Total current liabilities Long-term liabilities: Bonds payable 8,750 8,750 Total liabilities 20,190 18,930 Stockholders' equity: Common stock Additional paid-in capital 880 4,600 880 4,600 Total paid-in capital Retained earnings 5,480 31,818 5,480 27,460 Total stockholders' equity 37,298 32,940 Total liabilities and stockholders' equity $57,488 $51,870 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $87,000 $82,000 Cost of goods sold 56,000 52,000 Gross margin 31,000 30,000 Selling and administrative expenses: Selling expenses Administrative expenses 9,300 12,800 8,800 11,800 Total selling and administrative expenses 22,100 20,600 Net operating income Interest expense 8,900 1,050 9,400 1,050 Net income before taxes Income taxes 7,850 3,140 8,350 3,340 Net income Dividends to common stockholders 4.710 352 5.010 660 Net income added to retained earnings Beginning retained earnings 4,358 27,460 4,350 23,110 Ending retained earnings $31,818 $27,460 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 %
