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 990,000 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 $28. 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 $ 5,834 16,300 10,650 1,990 $ 6,650 9,200 8,960 2,480 Total current assets 34,774 27,290 Property and equipment: Land Buildings and equipment, net 7,900 21,100 7,900 20,900 Total property and equipment 29,000 28,800 Total assets $63,774 $56,090 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term $ 11,400 980 490 $ 9,250 1,650 490 12,870 11,390 Total current liabilities Long-term liabilities: Bonds payable 10,000 10,000 Total liabilities 22,870 21,390 Stockholders' equity: Common stock Additional paid-in capital 990 5,150 990 5,150 Total paid-in capital Retained earnings 6,140 34,764 6,140 28,560 Total stockholders' equity 40,904 34,700 Total liabilities and stockholders' equity $63,774 $56,090 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $98,000 $93,000 Cost of goods sold 61,500 57,500 Gross margin 36,500 35,500 Selling and administrative expenses: Selling expenses Administrative expenses 10,400 13,900 9,900 12,900 Total selling and administrative expenses 24,300 22,800 Net operating income Interest expense 12,200 1,200 12,700 1,200 Net income before taxes Income taxes 11,000 4,400 11,500 4,600 Net income Dividends to common stockholders 6,600 396 6,900 792 Net income added to retained earnings Beginning retained earnings 6,204 28,560 6,108 22,452 Ending retained earnings $34,764 $28,560 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 %
