Exercise 14-2 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 the year was $22 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 Accounts receivable, net Inventory Prepaid expenses $ 1,240 1,330 7,800 12,400 570 9,900 13,800 660 Total current assets Property and equipment: 9,600 35,428 45,028 $72,506 $67,128 9,600 37,306 46,906 Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable $19,900 $18,000 700 200 21,170 18,900 Accrued liabilities 1,070 200 Notes payable, short term Total current liabilities Long-term liabilities: 9,200 30,370 9,200 Bonds payable Total liabilities Stockholders' equity: Common stock 600 4,000 4,600 37,536 42,136 600 4,000 4,600 34,428 Additional paid-in capital Total paid-in capital Retained earningS Total stockholders' equity Total liabilities and stockholders' equity $72,506 $67,128 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year $66,000 $64,000 Sales Cost of goods sold Gross margin Selling and administrative expenses: 40,000 41,000 10,500 6,100 17,900 16,600 7,400 920 ,480 2,592 ,888 600 , 288 31,140 $37,536 $34,428 Selling expenses 11,000 6,900 Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 920 80 2,472 708 600 108 34,428 Required: Compute the following financial data and ratios for this year: 1. Working capital. (Enter answer in th 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio. (Round your answer to 2 decimal places.) 2 Current ratio 3. Acid-test ratio