Exercise 16-3 (Static) Financial Ratios for Asset Management (L016-3) 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 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 $0.75 last year and $0.40 this year. The market value of the company's common stock at the end of this year was 518. All of the company's sales are on account eller Corporation Comparative Balance Sheet (dollars in thousanda This Year St Year Assets Current star Cash 1,200 1,500 Accounts receivable, not 12,200 9,100 Inventory 9.700 8.200 Prepaid expon 1.800 2.100 Total current assets 25 OD 202360 Property and equipment Land 6,000 6.000 Buildings and equipment, net 19.200 10.000 Total property and equipment 25.200 35,000 Total acts 150,200 145.960 Listen and stockholders fruity Current abilities Recounts payable 1,500 S8.300 herved liabilities 600 760 Notes payable, short term 200 Total current liabilities 10.000 2.300 Long-term stitie Bonde peynile 5.000 Total liabilities Thu Stockholderity or Cook 200 Additional pain capital 9.000 5,000 Total peldvin capital 3. 36 Batained earning Moller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $79,000 $74,000 Coat of goods sold $2,000 40.000 Gross margin 27,000 26.000 Selling and administrative expenses Selling expenses 6,500 3,000 ministrative expenses 12.000 11.000 Total selling and administrative expenses 20500 19,000 Het operating income 6,500 7.000 Interest expense 600 600 Set income before taxe 5.900 6.400 Income taxes 2,360 2.560 Net Income 3,540 3,040 Dividends to como stockholders 320 600 Not Income added to retained earnings 3,220 3,240 Beginning retained earning 26,660 23 420 tinding retained earnings $29.000 126.650 Required: Compute the following financial dote for this year 1. Accounts receivable turnover (Assume that all sales are on account (Round your answer to 2 decimal places.) 2. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 3. Inventory turnover (Round your answer to 2 decimal places) 4 Average sale period. (Use 365 days in a year Round your Intermediate calculations and final answer to 2 decimal places.) 5. Operating cycle(Round your intermediate calculations and final answer to 2 decimal places.) 6. Total asset turnover (Round your answer to 2 decimal places.) 1 Accounts recevable mover 2. Average collection period 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 20, Duu 6,500 600 5,900 2,360 3,540 320 3,220 26,660 $29,880 1.UUU 7.000 600 6,400 2.560 3,840 600 3,240 23,420 $26,660 Required: Compute the following financial data for this year: 1. Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.) 2. Average collection period. (Use 365 days in a year. Round your Intermediate calculations and final answer to 2 d. 3. Inventory turnover. (Round your answer to 2 decimal places.) 4. Average sale period. (Use 365 days in a year. Round your Intermediate calculations and final answer to 2 decima 5. Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.) 6. Total asset turnover. (Round your answer to 2 decimal places.) days 1. Accounts receivable turnover 2. Average collection period 3. Inventory tumover 4 Average sale period 5. Operating cycle 6. Total asset turnover days days 4 5 points Weller Corporation Comparative Theone Statement and Reconciliation (dollars in thousanda) This Year Last Year Sales $79.000 $74,000 Cost of yoode sold 52,000 48,000 Gross margin 27/ 000 26.000 Selling and administrative expenses Selling expenses 8,500 8,000 Ministrative expenses 12,000 11,000 Total selling and administrative expenses 20.500 19.000 Not operating income 6.500 7,000 Interest expense 600 600 Not income before te 5,900 5.400 Income taxe 2,360 2560 Not income 3.540 3,40 Dividends to common stockholders 320 600 Net Income added to retained earnings 3.220 3.240 Deginning retained earning 25,660 23, 420 Ending retained earning 029.000 26,660 Book ent rences Required: Compute the following financial data for this year, 1. Earnings per share. (Round your answer to 2 decimal places.) 2. Price-earings 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.) Eamings per share 2 Price-camingsfato 3 Dividend payout to 4. Dividend yield ratio 5. Book value per share C 4 5 DO 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 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 $0.75 last year and $0.40 this year. The market value of the company's common stock at the end of this year was $18. All of the company's sales are on account Weller Corporation Comparative ale ce Sheet dollars in the inde) $1,200 12.300 9.100 1.100 $ 1.560 9.100 8,200 2100 fo 6,000 12200 25,200 $50,250 5.000 10.000 25,000 145.960 Assets Current star Cash Mounts receivable, not Inventory Trepaid expenses Total current as Property and inte Land bulding and equipment, set Total property and equipment Total sta Liabilities and Stockholders' quity Current LLLLL Ancounts payable Merved abilities Notes payable short term Total current Liabilities Long-term liabilities Donde payable Total llitea stockholdere quity Conon stock Mital pidin spital Total pada capital matandang Total stockholders equity Total Lities and stockholders' equity 9.500 600 $ 1,300 100 100 9.300 10,400 5.000 5.000 6200 3.000 16.66 3,000 29.90 30 650, 280 **5.16