Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 company's common stock at the end of this year was $25. All of the company's sales are on account. Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities \begin{tabular}{rr} $19,700 & $19,400 \\ 1,040 & 880 \\ 0 & 140 \\ \hline 20,740 & 20,420 \end{tabular} Long-term liabilities: Bonds payable Total liabilities \begin{tabular}{rr} 8,600 & 8,600 \\ \hline 29,340 & 29,020 \\ \hline \end{tabular} Stockholders' equity: Common stock Additional paid-in capital Total paid-in capital \begin{tabular}{rr} 2,000 & 2,000 \\ 4,000 & 4,000 \\ \hline 6,000 & 6,000 \end{tabular} Retained earnings Total stockholders' equity Total liabilities and stockholders' equity \begin{tabular}{rr} 47,723 & 38,859 \\ \hline 53,723 & 44,859 \\ \hline$83,063 & $73,879 \\ \hline \hline \end{tabular} Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started