Exercise 15-4 Financial Ratios for Debt Management [LO15-4] 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 700,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, 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 this year was $23. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: $1,2501,240 8,100 12,400 620 25,68022,360 Cash Accounts receivable, net Inventory Prepaid expenses 10,200 13,500 730 Total current assets Property and equipment: 10,200 44,56039,240 54,76049,440 $80,440 $71,800 10,200 Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: $20,300 $19,100 810 120 20,030 Accounts payable Accrued liabilities 970 Notes payable, short term Total current liabilities Long-term liabilities: 21,270 9,000 29,030 9,000 30,270 Bonds payable Total liabilities Stockholders' equity: 2,000 4,000 6,000 36,770 50,170 42,770 $80,440 $71,800 Common stock 2,000 4,000 6,000 44,170 Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year $67,000 $65,000 37,000 Sales Cost of goods sold Gross margin Selling and administrative expenses: 35,000 32 000 28,000 10,500 6,800 17,300 10,700 900 9,800 3,920 5, 880 350 5,530 36,770 31,240 $44,170 $36,770 Selling expenses 11,400 6,900 18,300 13,700 900 12,800 5,120 7,680 280 7,400 Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings Required Compute the following financial ratios for this year: .Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier (For all requirements, round your answers to 2 decimal places.) 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier