Exercise 14-4 Financial Ratios for Debt Management (L014-4) SK . 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 the year was $21. All of the company's sales are on account Koller Corporation Comparative Balance sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,200 $ 1,230 Accounts receivable, net 9.000 6.900 Inventory 12,200 12,500 Prepaid expenses 620 Total current assets 23,00 21.10 Property and equipment Land 9,700 9,700 Buildings and equipment, net 44,025 39.245 Total property and equipment Total assets 577.575 $20,125 Liabilities and Stockholders uity Current Labution Accounts payable 318,600 $17,500 Acered liabilities 1.060 720 0 280 Notes payable, short term total current liabilities 19,60 18.500 Tong-term liabilities Bonds payable 3.300 Total Ilabilities 28. 160 27,000 stockholderity: 2.000 2.000 Common stock int ences C This Year East Yor $1,180 9,000 12,200 620 23,000 $ 1.230 6,900 12.500 550 21.180 9,700 46,075 9,700 39.245 403205 $70,125 $77.575 OOH Assets Current sets: CA Accounts receivable, net Inventory Prepaid expenses Total current sota Property and equipment Land Boildings and equipment, bet Total property and equipment Total ats Libilities and stockholders uity Current abilities hocounts payable Accrued abilities Notes payable, short ters Total current liabilities Long-term liabilities bonda payable Total liabilities Stockholdere egoity Contok Additional pad wapital Total paid in capital Lind caring Total stockholders Total liabilities and stockholders' nuity $13,000 1,060 $12.500 720 200 18,500 19,660 1,500 3.500 20,260 Print 2,000 4.000 6,000 4115 2,000 0.000 9,000 11125 577.575 570, 125 Weer Corporation Comparative Incon Satement and econoton dollare In Lho The Year 566,000 $65.000 Contot good old 1.000 35,000 Gross angin 2.000 10.000 LE Saved Help You skipped this question in the previous attempt Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Sales This Year Last Year Cost of goods sold $66,000 565,000 37.000 35,000 Gross margin 29,000 30.000 Selling and administrative expenses Selling expenses 10,700 11,000 Administrative expenses 6500 G2100 Total selling and administrative expenses 17200 17300 tlet operating income 11,800 12,700 Taterent expense 050 SO Tot Income before taxes 10,950 11,850 Income taxes 4.0 4,240 Not Income 6,570 Dividends to connon stockholders 200 525 Not Income added to retained earnings 6,290 Teginning retained earnings 22.125 30.540 Tading retained sarning 34.415 $32.125 tine Required: Compute the following financial ration for this year 1. Times interest earned ratio 2. Dobt-to equity ratio 3. Equity multiplier (For all requirements, round your answers to 2 decimal places) 1 2 3 Times interest med ratio Debt-to-equity ratio Equity martie TO