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 950,000 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 $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 $ 770 $ 1,810 Accounts receivable, net 15,900 9,000 Inventory 10,450 8,800 Prepaid expenses 1,950 2,400 Total current assets 29,070 22,010 Property and equipment: Land 7,500 7,500 Buildings and equipment, net 20,700 20,500 Total property and equipment 28,200 28,000 Total assets $57,270 $50,010 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term $ 11,000 900 450 $ 9,050 1,450 450 12,350 10,950 Total current liabilities Long-term liabilities: Bonds payable Total liabilities 5,000 5,000 17,350 15,950 950 4,950 950 4,950 Stockholders' equity: Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 5,900 34,020 5,900 28,160 39,920 34,060 $57,270 $50,010 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $94,000 $89,000 Cost of goods sold 59,500 55,500 Gross margin 34,500 33,500 Selling and administrative expenses: Selling expenses 10,000 9,500 Administrative expenses 13,500 12,500 Total selling and administrative expenses 23,500 22,000 Net operating income 11,000 11,500 Interest expense 600 600 Net income before taxes Income taxes 10,400 4,160 10,900 4,360 6,240 380 6,540 760 Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 5,860 28,160 5,780 22,380 $34,020 $28,160 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 %
