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 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 the year was $22. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,180 10.000 12,700 600 24,480 $ 1,350 7,300 11,300 660 20,610 10,100 48,178 58,278 $82,758 10,100 39,995 50,095 $ 70, 705 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-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 $19,500 1,010 250 20,760 $19, 100 770 250 20, 120 10,000 30,760 10,000 30, 120 500 4,000 4,500 47,498 51,998 $82,758 500 4,000 4,500 36,085 40,585 $70, 705 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $75,255 $ 65,000 Cost of goods sold 37,200 38,000 Gross margin 38,055 27,000 Selling and administrative expenses: Selling expenses 10,500 10,900 Administrative expenses 7,200 6,900 Total selling and administrative expenses 17,700 17,800 Net operating income 20,355 9,200 Interest expense 1,000 1,000 Net income before taxes 19,355 8,200 Income taxes 7, 742 3,280 Net income 11,613 4,920 Dividends to common stockholders 200 375 Net income added to retained earnings 11,413 4,545 Beginning retained earnings 36,085 31,540 Ending retained earnings $ 47,498 $36,085 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.)