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 companys common stock at the end of the year was $22. 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 $ 1,340 Accounts receivable, net 9,100 7,700 Inventory 12,800 12,500 Prepaid expenses 630 540 Total current assets 23,740 22,080 Property and equipment: Land 11,000 11,000 Buildings and equipment, net 43,245 36,582 Total property and equipment 54,245 47,582 Total assets $ 77,985 $ 69,662 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 18,800 $ 18,000 Accrued liabilities 1,080 790 Notes payable, short term 190 190 Total current liabilities 20,070 18,980 Long-term liabilities: Bonds payable 8,800 8,800 Total liabilities 28,870 27,780 Stockholders' equity: Common stock 600 600 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 44,515 37,282 Total stockholders' equity 49,115 41,882 Total liabilities and stockholders' equity $ 77,985 $ 69,662 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 73,080 $ 66,000 Cost of goods sold 41,745 37,000 Gross margin 31,335 29,000 Selling and administrative expenses: Selling expenses 10,900 10,500 Administrative expenses 7,100 6,800 Total selling and administrative expenses 18,000 17,300 Net operating income 13,335 11,700 Interest expense 880 880 Net income before taxes 12,455 10,820 Income taxes 4,982 4,328 Net income 7,473 6,492 Dividends to common stockholders 240 450 Net income added to retained earnings 7,233 6,042 Beginning retained earnings 37,282 31,240 Ending retained earnings $ 44,515 $ 37,282 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.)