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 800,000 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 $18. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||
---|---|---|
This Year | Last Year | |
Assets | ||
Current assets: | ||
Cash | $ 1,280 | $ 1,560 |
Accounts receivable, net | 12,300 | 9,100 |
Inventory | 9,700 | 8,200 |
Prepaid expenses | 1,800 | 2,100 |
Total current assets | 25,080 | 20,960 |
Property and equipment: | ||
Land | 6,000 | 6,000 |
Buildings and equipment, net | 19,200 | 19,000 |
Total property and equipment | 25,200 | 25,000 |
Total assets | $ 50,280 | $ 45,960 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Accounts payable | $ 9,500 | $ 8,300 |
Accrued liabilities | 600 | 700 |
Notes payable, short term | 300 | 300 |
Total current liabilities | 10,400 | 9,300 |
Long-term liabilities: | ||
Bonds payable | 5,000 | 5,000 |
Total liabilities | 15,400 | 14,300 |
Stockholders' equity: | ||
Common stock | 800 | 800 |
Additional paid-in capital | 4,200 | 4,200 |
Total paid-in capital | 5,000 | 5,000 |
Retained earnings | 29,880 | 26,660 |
Total stockholders' equity | 34,880 | 31,660 |
Total liabilities and stockholders' equity | $ 50,280 | $ 45,960 |
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||
---|---|---|
This Year | Last Year | |
Sales | $ 79,000 | $ 74,000 |
Cost of goods sold | 52,000 | 48,000 |
Gross margin | 27,000 | 26,000 |
Selling and administrative expenses: | ||
Selling expenses | 8,500 | 8,000 |
Administrative expenses | 12,000 | 11,000 |
Total selling and administrative expenses | 20,500 | 19,000 |
Net operating income | 6,500 | 7,000 |
Interest expense | 600 | 600 |
Net income before taxes | 5,900 | 6,400 |
Income taxes | 2,360 | 2,560 |
Net income | 3,540 | 3,840 |
Dividends to common stockholders | 320 | 600 |
Net income added to retained earnings | 3,220 | 3,240 |
Beginning retained earnings | 26,660 | 23,420 |
Ending retained earnings | $ 29,880 | $ 26,660 |
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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