Exercise 14-5 Financial Ratios for Assessing Profitability (L014-5) 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 950,000 shares of common stock were outstanding. The Interest rate on the bond payable was 12%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and 80.40 this year. The market value of the company's common stock at the end of the year was $26. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Your Last Year Assets Current : Cash 770 11,810 Accounts receivable, net 15,000 Inventory 20,450 Prepaid expenses 10 2000 Total current assets Property and equipment Land 7.500 7500 Buildings and equipoent, net 20200 20, 500 Total property and equipment 28,200 Total assets 557,270 Liabilities and Stockholders' Equity Current Italities Accounts payable $11.000 Accrued liabilities 900 1,450 Notes payable, short ters 450 9.00 5.00 $11,000 98 450 12,350 $9.850 1:45 45e 19,950 5.000 17,350 5,Bee 15,950 Accounts payable Accrued Habilities Notes payable, short term Total current liabilities Long term Habilities: 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 950 4,95e 5,900 34,820 39,92e $57,27 950 4,95 5,900 28.168 34,862 $50,10 Weller Corporation Compacative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $94.000 589,600 Cost of goods sold 59,500 55,500 Gross margin 34,500 38,500 Selling and administrative expenses: Selling expenses 10,000 9.500 Administrative expenses 13,500 12.500 Total selling and administrative expenses 23,500 22.000 Net operating income 11,000 11,500 Interest expense 600 600 Net income before taxes 18,480 10.900 Income taxes 4,160 4.360 Net income 6,240 6,540 Net income before taxes Income taxes Net Income Dividends to common stockholders Net Income added to retained earnings Beginning retained earnings Ending retained earnings 18.400 4,160 6.210 380 5,860 28.160 $34,020 19, see 4,360 6,540 760 5,780 22,380 $28,160 Required: Compute the following financial data for this year. 1. Gross margin percentage. (Round your percentage answer to 1 decimal place lie., 0.1234 should be entered as 12:3).) 2. Net profit margin percentage (Round your percentage answer to 1 decimal place (.e., 0.1234 should be entered as 12 3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 4. Return on equity (Round your percentage answer to 2 decimal places (ie., 0.1234 should be entered as 12.34).) 1. Gross margin percentago 2. Net profit margin percentago 3. Return on total assets 4. Return on equity S