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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.

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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 $29. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,100 9,700 12,200 220 24,220 $ 1,370 7.900 12,100 620 21.990 10,200 44,644 54,344 $79,064 18,200 36,202 46,402 $68,392 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 Habilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities Bonds payable Total liabilities Stockholders' equity: Connon stock Additional paid in capital Total pald-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $18,100 710 319,000 1,050 140 20,220 140 18,950 0,500 29,020 27.250 600 4.000 1,600 600 4.000 4,600 36,042 40x542 568,392 30.044 $79,064 Last Year $65,000 38,000 27,eee Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $75,000 Cost of goods sold 39,000 Gross margin 36,000 Selling and administrative expenses: Selling expenses 11,400 Administrative expenses 7,300 Total selling and administrative expenses 18,700 Net operating income 17,300 Interest expense 880 Net income before taxes 16,420 Income taxes 6,568 Net income 9,852 Dividends to common stockholders 450 Net income added to retained earnings 9,402 Beginning retained earnings 36,042 Ending retained earnings $45,444 10,700 6,500 17,200 9,800 880 8,920 3,568 5,352 450 4.902 31,140 $36,042 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

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