Exercise 16-5 (Static) Financial Ratios for Assessing Profitability (L016-5) 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 This marcant Year $ 1.200 12.300 9.750 1.50 25.000 $1,560 9.100 8.200 2.100 2016 6.000 32.000 Meller Corporation Comparative Balance sheet dollars in thousanda) Assets Current star Cach Mccounts receivable, Inventory Prepaid expensee Total current annet Property and equipment Land Dublings and equipment Total property and equipment Total aseta Liabilities and stockholders' quity Current Lilit counts payable Mered liabilities Watee payable short ter Total current listes Long-teristis Donde payabia Total sitio Bekho quity Costock Addisional pesto pica Total pe capital Searning 6,000 19,200 25.200 350,200 565.960 9,500 500 300 10.00 8.300 700 300 3.300 5.000 150 5.000 ILGE 100 5.000 VA 3:00 26 Heller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $79,000 $74,000 Coat of goods sold 52,000 Gross margin 48.000 27,000 26.000 Selling and administrative expenses Selling expenses 8,500 3,000 Administrative expenses 12.000 11,000 Total selling and administrative expenses 20.500 19.000 Net operating income 6,500 7.000 Interest expense 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 earning 3,220 3.240 Deginning retained earning 25.660 23.420 tinding retained earni $29.00 926,660 Required: Compute the following financial data for this year, 1. Gross margin percentage. (Round your percentage answer to 1 decimal place (lie., 0.1234 should be entered as 12,3).) 2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (le, 0.1234 should be entered as 12.3) 3. Return on total assets. (Round your percentage answer to 1 decimal place (le, 0.1234 should be entered as 12.3).) 4. Return on equity. (Round your percentage answer to 2 decimal places (.e., 0.1234 should be entered as 12.34):) 1. Gross margin percentage 2. Net profit margin percentage 3 Return on total assets 4 Return on equity Exercise 16-5 (Static) Financial Ratios for Assessing Profitability (L016-5) 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 This marcant Year $ 1.200 12.300 9.750 1.50 25.000 $1,560 9.100 8.200 2.100 2016 6.000 32.000 Meller Corporation Comparative Balance sheet dollars in thousanda) Assets Current star Cach Mccounts receivable, Inventory Prepaid expensee Total current annet Property and equipment Land Dublings and equipment Total property and equipment Total aseta Liabilities and stockholders' quity Current Lilit counts payable Mered liabilities Watee payable short ter Total current listes Long-teristis Donde payabia Total sitio Bekho quity Costock Addisional pesto pica Total pe capital Searning 6,000 19,200 25.200 350,200 565.960 9,500 500 300 10.00 8.300 700 300 3.300 5.000 150 5.000 ILGE 100 5.000 VA 3:00 26 Heller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $79,000 $74,000 Coat of goods sold 52,000 Gross margin 48.000 27,000 26.000 Selling and administrative expenses Selling expenses 8,500 3,000 Administrative expenses 12.000 11,000 Total selling and administrative expenses 20.500 19.000 Net operating income 6,500 7.000 Interest expense 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 earning 3,220 3.240 Deginning retained earning 25.660 23.420 tinding retained earni $29.00 926,660 Required: Compute the following financial data for this year, 1. Gross margin percentage. (Round your percentage answer to 1 decimal place (lie., 0.1234 should be entered as 12,3).) 2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (le, 0.1234 should be entered as 12.3) 3. Return on total assets. (Round your percentage answer to 1 decimal place (le, 0.1234 should be entered as 12.3).) 4. Return on equity. (Round your percentage answer to 2 decimal places (.e., 0.1234 should be entered as 12.34):) 1. Gross margin percentage 2. Net profit margin percentage 3 Return on total assets 4 Return on equity