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 500,000 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 $24. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,180 10,200 13,100 660 25,140 $ 1,400 8,200 11,000 520 21,128 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: 9.208 44,554 53, 754 $78,894 9,200 40,432 49.632 $70, 752 $17,700 840 $19,700 1,070 280 21,050 18,820 9,300 30, 350 9,300 28.120 are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $1,180 1.400 10,2008 ,200 13,100 11.000 660 520 25440 21.120 9,200 44,554 53 754 $78,894 9,200 40.432 49,532 $70.752 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 abilities Long-term Liabilities! Bonds payable Total liabilities Stockholders' equitys Common stock Additional paid-in capital Total paid in Capital Retained earnings Total stockholders equity Total abilities and stockholders' equity $10,700 1,070 $17,700 840 280 18,820 21,00 9. 100 9,300 30,150 4.500 38, 112 42612 $70,752 Walter foraration Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $71,000 $65,000 Cost of goods sold 42,000 35,000 Gross margin 29,000 30,000 Selling and administrative expenses: Selling expenses 10,500 10,100 Administrative expenses 7,300 6,900 Total selling and administrative expenses 17,800 17,000 Net operating income 11,200 13,000 Interest expense 930 Net, income before taxes 10,270 12.070 Income taxes 4. 108 4,828 Net income 6,162 7.242 Dividends to common stockholders 250 Net income added to retained earnings 5.912 6,992 Beginning retained earnings 38, 132 31,140 Ending retained earnings $44,044 $38, 132 930 258 Required: 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