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 920,000 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 $24.00. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 2,772 15,600 10,300 1,920 30.592 $ 2,93e 10,350 3,680 2.340 24,300 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 FE 7.200 20,400 27,600 $58,192 7, 20e 20, 20e 27,408 $51,700 1,920 30,592 2,340 24,300 7,200 20,400 27,600 $58,192 7,200 20,200 27,400 $51,700 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: Common stock Additional paid in capital Total paid in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $10,700 840 420 11,960 $ 8,900 1,300 42e 10, 620 7,500 19,460 7,500 18, 120 92e 4, 80e 5,720 33, 012 38,732 $58, 192 92e 4,80e 5,720 27, 860 33,580 $51,700 Weller Corporation Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $91,000 $86,000 Cost of goods sold 58,000 54,600 Gross margin 33,000 32,000 Selling and administrative expenses: Selling expenses 9,700 9, 200 Administrative expenses 13,200 12,200 Total selling and administrative expenses 22,980 21,400 Net operating income 10,120 10, 600 Interest expense 90e gee Net income before taxes 9,200 9,700 Income taxes 3,680 3,880 Net income 5,520 5,820 Dividends to common stockholders 368 736 Net income added to retained earnings 15,152 5, 084 Beginning retained earnings 27,860 22,776 Ending retained earnings $33,012 $27,860 Required: Compute the following financial data for this year 1. Earnings per share. (Round your answer to 2 decimal places.) Net income added to retained earnings Beginning retained earnings Ending retained earnings 5,084 5,152 27,860 $33,012 22,776 $27,860 3 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 decim 3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 deci 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 Book value per share
