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. Weller Corporation Comparative Balance Sheet (dollars in thousands) This YearLast Year Assets Current assets: $ Cash $ 1,220 1,270 Accounts receivable, net Inventory 9,300 7,000 13,900 11,400 Prepaid expenses Total current assets 630 520 25,050 20,190 Property and equipment: Land 10,700 10,700 Buildings and equipment, net 41,095 40,084 Total property and equipment 51,795 50,784 $ $ Total assets 76,845 70,974 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: $ 18,900 18,400 1,090 840 210 210 20,200 19,450 Bonds payable Total liabilities Stockholders' equity: Common stock 8,600 8,600 28,800 28,050 600 600 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 43,445 38,324 Total stockholders' equity 48,045 42,924 Total liabilities and stockholders' equity $ $ 76,845 70,974 Sales Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year $ 70,905 Last Year $ 64,000 Sales Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) 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 This Year Last Year $ 70,905 $ 64,000 43,010 33,000 27,895 31,000 11,400 11,000 6,700 6,500 18,100 17,500 9,795 13,500 860 860 8,935. 12,640 3,574 5,056 5,361 7,584 240 300 5,121 38,324 7,284 31,040 $ 43,445 $ 38,324 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: 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 days 3. Inventory turnover 4. Average sale period 5. Operating cycle 6. Total asset turnover days days