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 companys common stock at the end of this year was $24. All of the companys sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,210 $ 1,270 Accounts receivable, net 10,800 7,900 Inventory 12,700 11,200 Prepaid expenses 700 690 Total current assets 25,410 21,060 Property and equipment: Land 10,200 10,200 Buildings and equipment, net 45,465 35,078 Total property and equipment 55,665 45,278 Total assets $ 81,075 $ 66,338 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 18,600 $ 17,700 Accrued liabilities 1,000 820 Notes payable, short term 190 190 Total current liabilities 19,790 18,710 Long-term liabilities: Bonds payable 9,700 9,700 Total liabilities 29,490 28,410 Stockholders' equity: Common stock 500 500 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,500 4,500 Retained earnings 47,085 33,428 Total stockholders' equity 51,585 37,928 Total liabilities and stockholders' equity $ 81,075 $ 66,338 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 85,085 $ 64,000 Cost of goods sold 43,020 42,000 Gross margin 42,065 22,000 Selling and administrative expenses: Selling expenses 10,900 10,300 Administrative expenses 7,100 6,000 Total selling and administrative expenses 18,000 16,300 Net operating income 24,065 5,700 Interest expense 970 970 Net income before taxes 23,095 4,730 Income taxes 9,238 1,892 Net income 13,857 2,838 Dividends to common stockholders 200 250 Net income added to retained earnings 13,657 2,588 Beginning retained earnings 33,428 30,840 Ending retained earnings $ 47,085 $ 33,428 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.)