Exercise 15-6 Financial Ratios for Assessing Market Performance [LO15-6] Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear belovw The company did not issue any new common stock during the year. A total of 990,000 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 this year was $27.50. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses 5,834$ 6,650 9,200 8,960 2,480 16,300 10,650 1,990 34,774 227,290 Total current assets Property and equipment: 7,900 Land 7,900 21,100 29,000 20,900 28,800 Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: $63,774 $56,090 $11,400 9,250 1,650 490 11,390 Accounts payable Accrued liabilities 490 12,870 Notes payable, short term Total current liabilities Long-term liabilities: 10,000 10,000 21,390 Bonds payable 22,870 Total liabilities Stockholders' equity: Common stock 990 5,150 6,140 34,764 28,560 990 5,150 6,140 Additional paid-in capital Total paid-in capita.l Retained earnings Total stockholders equity Total liabilities and stockholders' equity 40,904341 100 $63,774 $56,090 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales Cost of goods sold Gross margin Selling and administrative expenses: $98,000 $93,000 -61,500 57,500 .50035,500 9,900 12,900 Selling expenses 10,400 13,900 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 24,300 22,800 12,700 1,200 11,500 4,600 6,900 792 6,108 22,452 $34,764 $28,560 12,200 1.200 11,000 4,400 6,600 396 6,204 28,560 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 intermediate calculations and final 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
