Exercise 14-2 (Algo) Financial Ratios for Assessing Liquidity (L014-2) 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 600,000 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 Heller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,190 11,000 13,700 710 26,600 $ 1,370 8,100 10,700 630 20,800 Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: 10,000 45,342 55,842 $ 82,442 10,000 41,046 51,046 $ 71,846 $19,400 960 $ 17,560 700 160 18,360 16e 20,528 Prev 1 of 7 !!! Next > (UUltas 11 LUus alus) This Year Last Year $ 1,190 11,000 13,700 710 26,600 $ 1,370 8,100 10,700 630 20,800 10,000 45,842 55,842 $ 82,442 10,000 41,046 51,046 $ 71,846 Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid in capital Total paid in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 19,480 960 160 20,520 $ 17,500 700 160 18,360 9,900 30, 420 9,900 28,260 600 4,000 4,600 47,422 52,022 $ 82,442 600 4, eee 4,60e 38,986 43,586 $ 71,846 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Last Year $ 66,000 34,000 32,000 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $ 70,000 Cost of goods sold 36,00 Gross margin 34,000 Selling and administrative expenses: Selling expenses 10,900 Administrative expenses 7,380 Total selling and administrative expenses 18,200 Net operating income 15,800 Interest expense 998 Net income before taxes 14,810 Income taxes 5,924 Net income 8,886 Dividends to common stockholders 450 Net income added to retained earnings 8,436 Beginning retained earnings 38,986 Ending retained earnings $ 47,422 10,600 6,100 16,700 15,300 990 14,310 5,724 8,586 240 8,346 30,640 $ 38,986 Required: Compute the following financial data and ratios for this year: 1. Working capital. (Enter your answer in thousands.) 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio. (Round your answer to 2 decimal places.) 1. Working capital 2. Current ratio 3. Acid-test ratio BE
