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 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 the year was $29. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,190 9,900 13,900 780 25,770 $ 1,410 8,000 11,300 700 21,410 10,800 40,934 51,734 $77,504 10,800 33,422 44,222 $65,632 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 $20,100 1,000 200 21,300 $17,600 730 200 18,530 8,300 29,600 8,300 26,830 600 4,000 4,600 43,304 47,904 $77,504 600 4,000 4,600 34,202 38,802 $65,632 Last Year $65,000 41,000 24,000 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $73,000 Cost of goods sold 38,000 Gross margin 35,000 Selling and administrative expenses: Selling expenses 10,700 Administrative expenses 7,300 Total selling and administrative expenses 18,000 Net operating income 17,000 Interest expense Net income before taxes 16,170 Income taxes 6, 468 Net income 9,702 Dividends to common stockholders 600 Net income added to retained earnings 9,102 Beginning retained earnings 34,202 Ending retained earnings $43,394 83 10,600 6. 309 16,900 7,100 830 6,270 2.508 3,762 600 3,162 31,040 $34,202 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.) 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