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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 700,000 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 $0.75 last year and $0.40 this year. The market value of the companys common stock at the end of this year was $21. All of the companys sales are on account.

Weller Corporation Comparative Balance Sheet (dollars in thousands)
This Year Last Year
Assets
Current assets:
Cash $ 1,150 $ 1,320
Accounts receivable, net 10,700 8,400
Inventory 12,100 12,300
Prepaid expenses 610 530
Total current assets 24,560 22,550
Property and equipment:
Land 9,900 9,900
Buildings and equipment, net 44,123 39,579
Total property and equipment 54,023 49,479
Total assets $ 78,583 $ 72,029
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 20,000 $ 18,500
Accrued liabilities 1,100 830
Notes payable, short term 0 270
Total current liabilities 21,100 19,600
Long-term liabilities:
Bonds payable 8,100 8,100
Total liabilities 29,200 27,700
Stockholders' equity:
Common stock 2,000 2,000
Additional paid-in capital 4,000 4,000
Total paid-in capital 6,000 6,000
Retained earnings 43,383 38,329
Total stockholders' equity 49,383 44,329
Total liabilities and stockholders' equity $ 78,583 $ 72,029

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
This Year Last Year
Sales $ 68,000 $ 64,000
Cost of goods sold 40,000 32,000
Gross margin 28,000 32,000
Selling and administrative expenses:
Selling expenses 11,300 10,700
Administrative expenses 7,000 6,800
Total selling and administrative expenses 18,300 17,500
Net operating income 9,700 14,500
Interest expense 810 810
Net income before taxes 8,890 13,690
Income taxes 3,556 5,476
Net income 5,334 8,214
Dividends to common stockholders 280 525
Net income added to retained earnings 5,054 7,689
Beginning retained earnings 38,329 30,640
Ending retained earnings $ 43,383 $ 38,329

Required:

Compute the following financial ratios for this year:

1. Times interest earned ratio.

2. Debt-to-equity ratio.

3. Equity multiplier.

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