Exercise 14-4 (Algo) Financial Ratios for Debt Management (L014-4) 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 700,000 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 $28. All of the company's sales are on account Weller Corporation Comparative Balance sheet (dollars in thousanda) This Year Last Year $ 2,140 9,200 12,800 790 23,930 $ 1.350 7,600 11,200 650 20,800 9,200 42,847 52,047 $ 75,977 9,200 40,071 49,271 5 70,071 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 Habilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities Bonda payable Total liabilities Stockholders' equity Common stock Adational paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 18,800 1,090 O 19,899 $ 19,400 780 280 20.460 9.400 29,290 9,400 29,860 2,000 4,000 6.000 40,687 46,687 $ 75,977 2,000 4.000 6,000 34,211 40.211 $ 70,071 Last Year $ 66,000 42,000 24,000 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $ 69,000 Cost of goods sold 39,000 Gross margin 30,000 Selling and administrative expenses : Selling expenses 11,100 Administrative expenses 6,700 Total selling and administrative expenses 17,800 Net operating income 12,200 Interest expense 940 Net income before taxes 11,260 Income taxes 4,504 Net income 6,756 Dividends to common stockholders 280 Net income added to retained earnings 6.476 Beginning retained carnings 34,211 Ending retained earningo $ 40,687 10,100 6,300 16,400 7,600 940 6,660 2,664 3,996 525 3,471 30,740 $ 34,211 Required: Compute the following financial ratios for this year: 1. Times interest earned ratio, 2. Debt-to-equity ratio. 3. Equity multiplier (For all requirements, round your answers to 2 decimal places.) 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier