Item$5$

$8\mathrm{.}33$

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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 $$0\mathrm{.}75$ last year and $$0\mathrm{.}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.

Weller Corporation

Comparative Balance Sheet

$($dollars in thousands$)$

This Year Last Year

Assets

Current assets:

Cash $ $1,280$ $ $1,560$

Accounts receivable, net $12,3009,100$

Inventory $9,7008,200$

Prepaid expenses $1,8002,100$

Total current assets $25,08020,960$

Property and equipment:

Land $6,0006,000$

Buildings and equipment, net $19,20019,000$

Total property and equipment $25,20025,000$

Total assets $ $50,280$ $ $45,960$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ $9,500$ $ $8,300$

Accrued liabilities $600700$

Notes payable, short term $300300$

Total current liabilities $10,4009,300$

Long$-$term liabilities:

Bonds payable $5,0005,000$

Total liabilities $15,40014,300$

Stockholders' equity:

Common stock $800800$

Additional paid$-$in capital $4,2004,200$

Total paid$-$in capital $5,0005,000$

Retained earnings $29,88026,660$

Total stockholders' equity $34,88031,660$

Total liabilities and stockholders' equity $ $50,280$ $ $45,960$

Weller Corporation

Comparative Income Statement and Reconciliation

$($dollars in thousands$)$

This Year Last Year

Sales $ $79,000$ $ $74,000$

Cost of goods sold $52,00048,000$

Gross margin $27,00026,000$

Selling and administrative expenses:

Selling expenses $8,5008,000$

Administrative expenses $12,00011,000$

Total selling and administrative expenses $20,50019,000$

Net operating income $6,5007,000$

Interest expense $600600$

Net income before taxes $5,9006,400$

Income taxes $2,3602,560$

Net income $3,5403,840$

Dividends to common stockholders $320600$

Net income added to retained earnings $3,2203,240$

Beginning retained earnings $26,66023,420$

Ending retained earnings $ $29,880$ $ $26,660$

Required:

Compute the following financial data for this year:

Gross margin percentage.

Note: Round your percentage answer to $1$ decimal place $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}3).$

Net profit margin percentage.

Note: Round your percentage answer to $1$ decimal place $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}3).$

Return on total assets.

Note: Round your percentage answer to $1$ decimal place $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}3).$

Return on equity.

Note: Round your percentage answer to $2$ decimal places $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}34).$