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 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 this year was $24. All of the company's sales are on account. Assets Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year 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 $ 1,270 9,800 13,100 $ 1,330) 8,300 12, 200 730 24,900 9,900 48, 109 58,009 $ 82,909 $ 20,200 900 260 21,360 530 22,360 9,900 36,506 46,406 $ 68,766 $ 18,900 780 260 19,940 8,900 30,260 8,900 28,840 600 600 4,000 4,000 4,600 4,600 48,049 52,649 $ 82,909 35,326 39,926 $ 68,766 Weller Corporation Comparative Income Statement and Reconciliation. (dollars in thousands) 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: Last Year $ 64,000 38,000 26,000 6,800 17,300 8,700 This Year $ 85,070 44,275 40,795 11,500 6,800 10, 500 18,300 22,495 898 890 21,605 7,810 8,642 3,124 12,963 4,686 240 600 12,723 35,326 4,086 31,240 $ 48,049 $ 35,326 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.)