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 50 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 Balance Sheet (dollars in thousands) This Year Last Year $ 1,280 12,300 9,700 1,800 25.080 $ 1,560 9.100 8.200 2,100 20,960 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' culty 6,000 19,200 25, 200 550,200 6,000 19,000 25.000 545,960 $9,500 600 300 10,400 $18,300 700 300 9.300 15.000 5.000 14,300 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $79,000 574,00 Cost of goods sold 52,000 48,000 Gross margin 27,000 26,000 Selling and administrative expensest Selling expenses 8,500 Administrative expenses 8,000 12.000 11, INO Total selling and administrative expenses 20.500 19,000 Net operating income 6,500 Interest expense 7,000 600 600 Net Income before taxes 5,900 6,400 Income taxes 2,360 2.560 Net Income 3,540 3,840 Dividends to common stockholders 320 600 Net income added to retained earnings 3,220 3,240 Beginning retained earnings 26,660 23,420 Ending retained earnings $29,880 $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 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.) 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 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.) days 1. Accounts receivable turnover 2 Average collection period 3. Inventory turnover 4 Average sale period 5. Operating cycle 6 Total asset lumover days days