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 $25. 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 $ 1,240 $ 1,350 Accounts receivable, net 9,500 6,700 Inventory 13,200 10,700 Prepaid expenses 750 560 Total current assets 24,690 19,310 Property and equipment: Land 10,600 20,600 Buildings and equipment, net se 524 43,032 Total property and equipment 61,124 53,632 Total assets $85,814 $72,942 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $19,600 $19,200 Accrued liabilities 990 838 Notes payable, short term 140 140 Total current liabilities 20,730 20,178 Long-term liabilities: Bonds payable 8,800 8,800 Total liabilities 292530 28,970 Stockholders' equity: Common stock 600 6ee Additional paid-in capital 4,00 4.000 Total paid-in capital 4,600 4,60 Retained earnings 51,684 39,372 Total stockholders' equity 56,284 43,972 ERER1 67 Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 600 4,000 4,600 51,684 56,284 $85,814 600 4,000 4,600 39,372 43,972 $72,942 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $75,000 $65,000 Cost of goods sold 35,000 33,000 Gross margin 40,000 32,000 Selling and administrative expenses: Selling expenses 10,800 10,600 Administrative expenses 7,300 6,800 Total selling and administrative expenses 18,100 17,400 Net operating income 21,900 14,600 Interest expense 880 880 Net income before taxes 21,020 13,720 Income taxes 8,408 5,488 Net income 12,612 8,232 Dividends to common stockholders 300 300 Net income added to retained earnings 12,312 7,932 Beginning retained earnings 39,372 31, 440 Ending retained earnings $51,684 $39,372 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 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