Exercise 14-2 (Algo) Financial Ratios for Assessing Liquidity [LO14-2] 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 $21. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Land Buildings and equipnent, net Total property and equipment Total assets Liabilities and Stockholders' Equity This YearLast Year 1,250 1,350 9,400 7,600 12,500 12,500 660 630 23,810 22,080 10,600 10,600 47,094 38,482 57,694 49,082 $ $ 81,504 71,162 Current liabilities: Accounts payable $ 20,300 17,600 Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock 1,040 760 150 150 21,400 18,510 8,000 30,200 8,800 27,310 600 600 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 46,614 39.252 Total stockholders' equity 51,214 43,852 $ $ Total liabilities and stockholders' equity 81,504 71,162 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $73,000 $ 66,000 Cost of goods sold 41,000 34,000 Gross margin 32,000 32,000 Selling and administrative expenses: Selling expenses 11,400 10,900 Administrative expenses 6,708 6,800 Total selling and administrative 18,100 17,700 expenses Net operating income i Interest expense 13,900 880 14,300 880 Income taxes Net income Net income before taxes Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 13,020 13,420 5,208 5,368 7,812 8,052 450 240 7,362 39,252 $ 46,614 7,812 31,440 $ 39,252 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