Exercise 14-3 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 the year was $28. All of the company's sales are on account. weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1.130 9,400 13,500 710 24,740 5 1,310 8,000 11,000 530 20,840 10, sed 51,342 61,842 $86,582 10,500 41,222 51.222 $72,562 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 liabilities Notes payable, short term Total current liabilities Long-ter liabilities: Bonds payable Total Habilities Stockholders' equity Common stock Additional paid in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $19,500 1,020 300 21,120 $19,000 850 380 20,150 8,800 29,920 28,950 660 500 4.600 52,062 56.662 $86,552 4.600 39,012 43,612 572,562 eller Corporation Type here to search SH Last Year $66,000 33,000 33,000 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $81,780 Cost of goods sold 41,650 Gross margin 40,130 Selling and administrative expenses: Selling expenses 10,700 Administrative expenses 6,400 Total selling and administrative expenses 17,100 Net operating income 23,030 Interest expense 880 Net income before taxes 22,150 Income taxes 8,860 Net income 13,290 Dividends to common stockholders 240 Net income added to retained earnings 13,050 Beginning retained earnings 39,012 Ending retained earnings $52,062 10,600 6,900 17,500 15,500 880 14,620 5,848 8,772 600 8. 172 30,840 $39,012 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.) 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