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In need of some help please! Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company
In need of some help please!
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 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, 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 $22. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet dollars in thousands) This Year Last Year Assets Current assets: $ 1,260 7,600 11,200 $1,190 9,700 Cash Accounts receivable, net Inventory 13,500 Prepaid expenses 770 530 25,160 20,590 Total current assets Property and equipment 9,400 48,530 9,400 43,430 52,830 Land Buildings and equipment, net Total property and equipment 57,930 $83,090 $73,420 Total assets Liabilities and Stockholders Equity Current liabilities Accounts payable Accrued liabilities $19,100 1,050 $19,100 760 160 Notes payable, short term Total current liabilities 20,150 20,020 Long-term liabilities: Bonds payable 9,000 29,150 9,000 29,020 Total liabilities Stockholders' equity: 2,000 4,000 6,000 47,940 53,940 Common stock 2,000 4,000 6,000 38,400 44,400 Additional paid- in capital Total paid-in capital Retained earnings Total stockholders' equity $83,090 $73,420 Total liabilities and stockholders' equity Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $75,000 40,000 35,000 $66,000 35,000 31,000 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses 10,300 6,700 17,000 14,000 11,300 6,500 17,800 Total selling and administrative expenses Net operating income Interest expense 17,200 900 900 Net income before taxes 16,300 6,520 9,780 13,100 5,240 7,860 600 Income taxes Net income 240 Dividends to common stockholders Net income added to retained earnings 9,540 38,400 7,260 31,140 Beginning retained earnings $47,940 $38,400 Ending retained earnings Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplierStep by Step Solution
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