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 830,000 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 this year was $19.50. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Assets | ||
Current assets: | ||
Cash | $ 5,078 | $ 5,190 |
Accounts receivable, net | 12,600 | 9,250 |
Inventory | 9,850 | 8,320 |
Prepaid expenses | 1,830 | 2,160 |
Total current assets | 29,358 | 24,920 |
Property and equipment: | ||
Land | 6,300 | 6,300 |
Buildings and equipment, net | 19,500 | 19,300 |
Total property and equipment | 25,800 | 25,600 |
Total assets | $ 55,158 | $ 50,520 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Accounts payable | $ 9,800 | $ 8,450 |
Accrued liabilities | 660 | 850 |
Notes payable, short term | 330 | 330 |
Total current liabilities | 10,790 | 9,630 |
Long-term liabilities: | ||
Bonds payable | 8,750 | 8,750 |
Total liabilities | 19,540 | 18,380 |
Stockholders' equity: | ||
Common stock | 830 | 830 |
Additional paid-in capital | 4,350 | 4,350 |
Total paid-in capital | 5,180 | 5,180 |
Retained earnings | 30,438 | 26,960 |
Total stockholders' equity | 35,618 | 32,140 |
Total liabilities and stockholders' equity | $ 55,158 | $ 50,520 |
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Sales | $ 82,000 | $ 77,000 |
Cost of goods sold | 53,500 | 49,500 |
Gross margin | 28,500 | 27,500 |
Selling and administrative expenses: | ||
Selling expenses | 8,800 | 8,300 |
Administrative expenses | 12,300 | 11,300 |
Total selling and administrative expenses | 21,100 | 19,600 |
Net operating income | 7,400 | 7,900 |
Interest expense | 1,050 | 1,050 |
Net income before taxes | 6,350 | 6,850 |
Income taxes | 2,540 | 2,740 |
Net income | 3,810 | 4,110 |
Dividends to common stockholders | 332 | 664 |
Net income added to retained earnings | 3,478 | 3,446 |
Beginning retained earnings | 26,960 | 23,514 |
Ending retained earnings | $ 30,438 | $ 26,960 |
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 intermediate calculations and final answer to 2 decimal places.)
5. Book value per share. (Round your answer to 2 decimal places.)
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