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 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 $29. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,120 10,600 12,800 650 25,170 $ 1,290 6,900 11,900 630 2 0, 720 9,400 45,214 54,614 $79, 784 9,400 44,852 54,252 $ 74,972 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 $19,200 910 290 20,400 $19,300 760 290 20,350 9,800 30, 200 9,800 30,150 700 4,000 4,700 44,884 49,584 $ 79,784 700 4,000 4,700 40,122 44,822 $ 74,972 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $67,000 $65,000 Cost of goods sold 39,000 32,000 Gross margin 28,000 33,000 Selling and administrative expenses : Selling expenses 11,300 10,100 Administrative expenses 7,200 6,200 Total selling and administrative expenses 18,500 16,300 Net operating income 9,500 16,700 Interest expense 980 980 Net income before taxes 8,520 15,720 Income taxes 3,408 6,288 Net income 5,112 9,432 Dividends to common stockholders 350 350 Net income added to retained earnings 4,762 9,082 Beginning retained earnings 40,122 31,040 Ending retained earnings $44,884 $40,122 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