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 860,000 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 $21.00. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Assets | ||
Current assets: | ||
Cash | $ 976 | $ 1,920 |
Accounts receivable, net | 15,000 | 10,050 |
Inventory | 10,000 | 8,440 |
Prepaid expenses | 1,860 | 2,220 |
Total current assets | 27,836 | 22,630 |
Property and equipment: | ||
Land | 6,600 | 6,600 |
Buildings and equipment, net | 19,800 | 19,600 |
Total property and equipment | 26,400 | 26,200 |
Total assets | $ 54,236 | $ 48,830 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Accounts payable | $ 10,100 | $ 8,600 |
Accrued liabilities | 720 | 1,000 |
Notes payable, short term | 360 | 360 |
Total current liabilities | 11,180 | 9,960 |
Long-term liabilities: | ||
Bonds payable | 6,250 | 6,250 |
Total liabilities | 17,430 | 16,210 |
Stockholders' equity: | ||
Common stock | 860 | 860 |
Additional paid-in capital | 4,500 | 4,500 |
Total paid-in capital | 5,360 | 5,360 |
Retained earnings | 31,446 | 27,260 |
Total stockholders' equity | 36,806 | 32,620 |
Total liabilities and stockholders' equity | $ 54,236 | $ 48,830 |
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Sales | $ 85,000 | $ 80,000 |
Cost of goods sold | 55,000 | 51,000 |
Gross margin | 30,000 | 29,000 |
Selling and administrative expenses: | ||
Selling expenses | 9,100 | 8,600 |
Administrative expenses | 12,600 | 11,600 |
Total selling and administrative expenses | 21,700 | 20,200 |
Net operating income | 8,300 | 8,800 |
Interest expense | 750 | 750 |
Net income before taxes | 7,550 | 8,050 |
Income taxes | 3,020 | 3,220 |
Net income | 4,530 | 4,830 |
Dividends to common stockholders | 344 | 688 |
Net income added to retained earnings | 4,186 | 4,142 |
Beginning retained earnings | 27,260 | 23,118 |
Ending retained earnings | $ 31,446 | $ 27,260 |
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
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