EXERCISE 15-2 Financial Ratios for Assessing Liquidity (L015-2] Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock dur ing the year. A total of 800,000 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 $0.40. The market value of the company's common stock at the end of the year was $18. All of the company's sales are on account. shares of com.company did not issandising company Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,280 12.300 9.700 1.800 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 $ 1,560 9,100 8.200 2.100 20,960 25,080 6,000 19,200 25,200 $50,280 6,000 19,000 25,000 $45,960 $ 9,500 600 $ 8,300 700 300 300 9,300 10,400 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 .......... 5,000 15,400 5,000 14,300 800 4,200 5,000 29,880 34,880 $50,280 800 4,200 5,000 26,660 31,660 $45,960 Chapter 15 Sales Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $79,000 $74,000 ...... Cost of goods sold ........ 52,000 48,000 Gross margin .......... 27,000 26,000 Selling and administrative expenses: Selling expenses 8,500 8,000 Administrative expenses ................ 12,000 11,000 Total selling and administrative expenses .... 20,500 19,000 Net operating income... 6,500 7,000 Interest expense........... 600 Net income before taxes .... 5,900 6,400 Income taxes . . . . . . . . ... 2,360 2,560 Net income ......... 3,540 3,840 Dividends to common stockholders ....... 320 Net income added to retained earnings .. 3,220 3,240 Beginning retained earnings ......... 26,660 23,420 Ending retained earnings $29,880 $26,660 600 320 Required: Compute the following financial data and ratios for this year: 1. Working capital. 2. Current ratio. 3. Acid-test ratio