Exercise 14-3 (Algo) Financial Ratios for Asset Management (L014-3] 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 So 40 this year. The market value of the company's common stock at the end of this year was $27. All of the company's sales are on account Heller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,138 9.300 12,100 660 23, 190 $ 1.390 6.700 12,500 600 21, 190 9,300 42,324 51,624 $ 74,814 9,300 35.520 44,320 $ 66,010 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 abilities 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 $ 20,500 930 140 21,570 $ 19,300 820 140 20,260 8,500 30.070 8,500 28.760 600 4.000 4,600 40, 144 44,744 $ 74,814 600 4,000 4,600 32,650 32250 $ 66,010 Last Year $ 64,000 42.ee 22.000 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $ 71,200 Cost of goods sold 39,360 Gross margin 31,840 Selling and administrative expenses : Selling expenses 11,100 Administrative expenses 7.000 Total selling and administrative expenses 18,100 Net operating income 13,740 Interest expense 850 Net income before taxes 12,890 Income taxes 5,156 Net Income 7,734 Dividends to common stockholders 240 Net Income added to retained earnings 7,494 Beginning retained earnings 32,650 Ending retained earnings $ 40,144 10,400 6.900 17.30 4,700 B50 3,850 1.540 2,310 300 2,010 30,640 $ 32,650 Required: Compute the following financial data for this year 1. Accounts receivable turnover (Assume that all sales are on account) (Round your answer to 2 decimal places.) 2. Average collection period (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal 3. Inventory turnover. (Round your answer to 2 decimal places.) 4. Average sale period (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal place 5. Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.) 6. Total asset turnover. (Round your answer to 2 decimal places.) days 1. Accounts receivable turnover 2. Average collection period 3. Inventory turnover 4 Average sale period 5. Operating cycle 6. Total asset turnover days days
