Homework #12 Hele Exercise 16-5 (Algo) Financial Ratios for Assessing Profitability (L016-5) Seve 5 00 bir Weferences Comparative financial statements for Weter Corporation, a merchandising company for the year ending December or below The company did not issue any new common stock during the year A total of 30,000 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 5075 year and 50 40 this year. The market value of the company common stock at the end of this year was $24. All of the company's sales are on account Wetter Corporation Comparative Balance Sheet Idollars in thousands Assets This Year Last Year current assetsi Cash Accounts receivable, net 54,038 $ 4,140 15.700 Inventory 10,400 10,350 8,720 Prepaid expenses 1,938 Total current assets 2,166 22.01 25.6.30 Property and equipment Land 7,380 7.100 Buildings and equipment, net 20,380 20,300 Total property and equipment 2280 Total assets 559.838 $ 53,220 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 10,880 $ 3,950 Accrued liabilities 860 1,350 43 Notes payable, short term Total current liabilities 2,90 10,730 Long-term liabilities: 8,250 8.750 Bonds payable 19,480 Total liabilities Stockholders' equity: 930 930 Comon stock 4,850 Additional paid in capital Total paid in capital 33, 199 27,960 Retained earnings 38.978 Total stockholders' equity $ 59,818 53,228 Total liabilities and stockholders' equity 20,840 5.750 5.78 33740 work 2 Hels 07 5 0.8 points Wetter Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Sales This Year Last Year $ 92,000 $ 87,600 Cost of goods sold Gross margin 58,5ea 54,500 32.500 Selling and administrative expenses Selling expenses 9,800 Administrative expenses 9,300 13,300 12,300 Total selling and administrative expenses 23/100 21,600 Net operating income 10,400 10,000 Interest expense 1.050 1,050 Net incone before taxes 9,350 9.asa Income taxes 3,740 Net incone 5,610 5,910 Dividends to common stockholders 372 744 Net incone added to retained earnings 5.238 5,166 Beginning retained earnings 27,960 22,294 Ending retained earnings 5 33,198 527,960 look 3.940 References Required: Compute the following financial data for this year 1. Gross margin percentage. (Round your percentage answer to 1 decimal place (.e., 0.1234 should be entered as 12.333 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 fie.. 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. Retum on total assets 4. Return on equity %
