Exercise 14-6 Financial Ratios for Assessing Market Performance (LO14-6) 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 940,000 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 $25.00. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year 5.350 10.450 $ 5,304 15,800 10,400 11,940 33,444 8,760 2,380 26,940 7,400 20,600 28,000 561,444 558.740 Assets Current assets Canh 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 Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders equity Comon stock raditional paid-in capital Total paid-in capital Retained earnings $ 9,000 $10.900 880 440 1.400 10.840 10.000 22.220 10.000 20,840 6.900 5.080 940 4,900 5.840 28,060 7 of 7 Prey - Next 940 4,900 Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 940 900 5,840 33,384 39,224 $61, 444 5,840 28,060 33,900 $54,740 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $93,000 $88,000 Cost of goods sold 59,000 55,000 Gross margin 34,000 33,000 Selling and administrative expenses : Selling expenses 9,900 9,400 Administrative expenses 13,400 12,400 Total selling and administrative expenses 23,300 Net operating income 10,700 Interest expense 1,200 1200 Net income before taxes 9,500 10,000 Income taxes 3,800 4.000 Net income 5,700 Dividends to common stockholders Net income added to retained earnings 5,324 5.248 Beginning retained earnings 28,060 22.812 Ending retained earnings $33,384 $28,060 21 800 1.200 6.000 376 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.)
