Exercise 14-2 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 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 the year was $23. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands ) This Year Last Year $ 1,250 10,000 13.400 630 25,280 $ 1.380 7,500 12,000 650 21,330 888 9,300 48,758 58,058 $83,338 9.300 40,544 49,844 $71.374 Assets Current assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Tand 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 $17.500 $19,000 1.040 230 20.270 700 4,000 4,700 700 4,000 4,700 39.064 3.764 $71,574 53,968 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $70,000 $66,000 Cost of goods sold 33,000 34,000 Gross margin 37,000 32,000 Selling and administrative expenses: Selling expenses 11,300 10,100 Administrative expenses 7,200 6,700 Total selling and administrative expenses 18,500 16,800 Net operating income 18,500 15,200 Interest expense 910 910 Net income before taxes 17,590 14,290 Income taxes 7,036 5,716 Net income 10,554 8,574 Dividends to common stockholders 350 350 Net income added to retained earnings 10, 204 8,224 Beginning retained earnings 39,064 30,840 Ending retained earnings $49,268 $39,064 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