Exercise 16-6 (Algo) Financial Ratios for Assessing Market Performance [LO16-6) 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 830,000 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 $19.50. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 5,078 12,600 9,850 1,830 29,358 $ 5,190 9,250 8,320 2,160 24,920 6,300 19,500 25,800 $55,158 6,300 19,300 25,600 $50,520 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 $ 9,800 660 330 10, 790 $ 8,450 B50 330 9,630 8,750 19.540 8,750 18,380 830 4,350 5,180 30, 438 35,618 $55, 158 830 4350 5,180 26,960 32, 140 $50,520 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $82,000 $77,000 Cost of goods sold 53,500 49,500 Gross margin 28,500 27,500 Selling and administrative expenses : Selling expenses 8,800 8,300 Administrative expenses 12,300 11,300 Total selling and administrative expenses 21,100 19,600 Net operating income 7,400 7,900 Interest expense 1,050 1,050 Net income before taxes 6,350 6,850 Income taxes 2,540 2,740 Net income 3,810 4,110 Dividends to common stockholders 332 664 Net income added to retained earnings 3,478 3,446 Beginning retained earnings 26,960 23,514 Ending retained earnings $30, 438 $26,960 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.) 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-earings ratio 3. Dividend payout ratio 4 Dividend yield ratio 5. Book value per share % %
