Exercise 16-2 (Algo) Financial Ratios for Assessing Liquidity [LO16-2] 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 500,000 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 $24. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) 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 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 This Year Last Year $ 1,080. $ 1,310 9,400 12,200 700 8,100 11,200 630 23,380 21,240 9,300 9,300 42,127 39,546 51,427 48,846 $ 74,807 $ 70,086 $ 18,900 900 230 $17,500 720 230 20,030 18,450 8,400 8,400 28,430 26,850 500 500 4,000 4,000 4,500 4,500 41,877 38,736 46,377 43,236 $ 74,807 $ 70,086 Sales Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousand's) This Year Last Year Cost of goods sold Gross margin $ 67,000 $ 65,000 42,000 35,000 25,000 30,000 11,500 10,000 6,800 6,500 18,300 16,500 6,700 13,500 840 840 5,860 12,660 2,344 5,064 3,516 7,596 375 200 3,141 7,396 38,736 31,340 $ 41,877 $ 38,736 Selling and administrative expenses: Selling expenses 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 data and ratios for this year: 1. Working capital. (Enter your answer in thousands.) 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio. (Round your answer to 2 decimal places.) 1. Working capital 2. Current ratio 3. Acid-test ratio