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 970.000 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 company's common stock at the end of this year was $26. 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 $ 3,302 $ 4,230 Accounts receivable, net 16,100 9, 100 Inventory 10,550 8,880 Prepaid expenses 1,970 2,440 Total current assets 31,922 24,650 Property and equipment: Land 7,700 7,700 Buildings and equipment, net 20,900 20,700 Total property and equipment 28,600 28,400 Total assets $ 60,522 $ 53,050 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 11,200 $ 9,150 Accrued liabilities 940 1,550 Notes payable, short term 470 470 Total current liabilities 12,610 11,170 Long-term liabilities: Bonds payable 7,500 7,500 Total liabilities 20, 110 18,670 Stockholders' equity: Common stock 970 970 Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 5,050 6,020 34,392 40,412 $ 60,522 5,050 6,020 28, 360 34, 380 $ 53,050 Last Year $ 91,000 56,500 34,500 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $ 96,000 Cost of goods sold 60,500 Gross margin 35,500 Selling and administrative expenses: Selling expenses 10,200 Administrative expenses 13,700 Total selling and administrative expenses 23,900 Net operating income 11,600 Interest expense 900 Net income before taxes 10,700 Income taxes 4,280 Net income 6,420 Dividends to common stockholders 388 Net income added to retained earnings 6,032 Beginning retained earnings 28,360 Ending retained earnings $ 34,392 9,700 12,700 22,400 12, 100 900 11,200 4,480 6,720 776 5,944 22,416 $ 28,360 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).) 2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 23,900 11,600 900 10, 700 4,280 6,420 388 6,032 28, 360 $ 34, 392 22,400 12, 100 900 11,200 4,480 6,720 776 5,944 22,416 $ 28, 360 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).) 2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 1. Gross margin percentage 2. Net profit margin percentage 3. Return on total assets 4. Return on equity % % % %
