Exercise 14-3 (Algo) Financial Ratios for Asset Management [LO14-3] 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 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 this year was $26. All of the company's sales 41 are on account. Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Weller Corporation Comparative Balance Sheet (dollars in thousands) Land Buildings and equipment, net Total property and equipment S 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 This Year Last Year $ 1,110 11,000 13,200 $ 1,300 6,800 11,500 670 540 25,980 20,140 10,500 10,500 46,838 38,106 57,338 48,606 $ 83,318 $ 68,746 $ 19,500 960 230 20,690 $ 19,300 860 230 20,390 9,400 30,090 9,400 29,790 500 500 4,000 4,000 4,500 4,500 48,728 34,456 53,228 38,956 $ 83,318 $ 68,746 Total liabilities and stockholders' equity Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses 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 Required: Compute the following financial data for this year: $ 64,000 $ 81,880 39,520 40,000 42,360 24,000 10,500 10,400 6,800 6,300 17,300 16,700 25,060 7,300 940 940 24,120 6,360 9,648 2,544 14,472 3,816 200 500 14,272 34,456 3,316 31,140 $ 48,728 $ 34,456 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 places.) 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 places.) 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.) 1. Accounts receivable turnover 2. Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle 6. Total asset turnover days days days < Prev