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 980,000 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 $2700. All of the company's sales are on account. Meller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assetsi Cash $4,568 Accounts receivable, net $ 5,440 16.200 Inventory 9,150 10,600 Prepaid expenses 8.920 1.980 2. 460 Total current assets 33,340 25,970 Property and equipment: Land 7,800 Buildings and equipment, not 7,800 21,000 20,800 Total property and equipment 28,800 28.600 Total assets 362,148 $54,570 Liabilities and Stockholders' Equity Current liabilities hecounts payable $11.300 $9.200 heerand liabilities 960 1.600 lates payable, short term 480 Total current liabilities 12.740 11,280 Long-term liabilities bonds payable 3,150 1,750 Total liabilities 21.490 20.030 Stockholders' equity Common stock 980 389 Additional paid in capital 5.100 S. 100 Total paid-in capital 6,080 6,080 Retained earnings 36.570 20.460 960 480 12,740 1,600 480 11,280 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 8,750 21,490 8,750 20,030 980 5, 100 6,080 34,578 40,658 $62,148 980 5, 100 6,080 28,460 34,540 $54,570 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $97,000 $92,000 Cost of goods sold 61,000 57.000 Gross margin 36,000 35,000 Selling and administrative expenses: Selling expenses 10,300 9.800 Administrative expenses 13,800 12,800 Total selling and administrative expenses 24, 100 22.600 Net operating income 11,900 12,400 Interest expense 1,050 1.050 Net income before taxes 10.850 11.350 Income taxes 4.340 4.540 Net Income 6,510 6,810 Dividends to common stockholders I 392 Net income added to retained earninga 5,118 6.926 Beginning retained earnings 22.434 Ending retained earninga 534,578 $20.460 Required: Compute the following financial data for this year 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 10,300 13,800 24, 100 11,900 1,050 10,850 4,340 6,510 392 6,118 28,460 $34,578 9,800 12,800 22,600 12,400 1,050 11,350 4,540 6,810 784 6,026 22.434 $28,460 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-earnings ratio 3. Divistond payout ratio 4. Dividend yield ratio 5. Book value per share % 96