Exercise 14-6 Financial Ratios for Assessing Market Performance (L014-6] 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 850,000 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 $0.40 this year. The market value of the company's common stock at the end of the year was $20.50. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year nces $ 1,810 12,800 9.950 1.850 26,410 $ 710 10,000 8,400 2,200 21,310 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 Acerved liabilities Notes payable, short term Total current liabilities Long-term liabilities 6,500 19,700 26,200 $52,610 6,500 19.500 26.000 $47,310 $10,000 700 350 11,050 $ 8,550 950 350 Check my work ------ 5 11,050 9,850 5,000 16,050 5.000 14,850 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 850 4,450 5.300 31,260 36,560 $52,610 850 4,450 5,300 27,160 32,460 $47,310 3.45.58 Book wrint Fences Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $84,000 $79,000 Cost of goods sold 54,500 50,500 Gross margin 29,500 28.500 Selling and administrative expenses Selling expenses 9,000 8.500 Administrative expenses 12.500 11,500 Total selling and administrative expenses 21,500 20.000 Net operating income 8,000 8.500 Interest expense 600 600 Net income before taxes 7.400 7,900 Income taxes 2.960 3, 160 Net income 4,740 Dividends to common stockholders 340 Net income added to retained earnings 4,100 4,060 Beginning retained earnings 27,160 23.100 Ending retained earnings $31,260 $27,160 680 Check my work Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 4,440 340 4,100 27,160 $31,260 4,740 680 4,060 23,100 $27,160 Required: Compute the following financial data for this year: 1. Earnings per share. (Round your answer to 2 decimal places.) 2. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.) 3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.) 4. Dividend yield ratio. (Round your answer to 2 decimal places.) 5. Book value per share. (Round your answer to 2 decimal places.) 1. Earnings per share 2. Price-earnings ratio 3. Dividend payout ratio 4. Dividend yield ratio 5. Book value per share % %
