managerial acct sos
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 $24. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,100 9,900 12,800 740 24,540 $ 1,410 7,500 11,500 570 20,980 9,300 48,180 57,480 $82,020 9,300 41,060 50,360 $71,340 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 $18,600 990 $18,900 800 250 19,950 19,590 9,000 28,590 9,000 28,950 2,000 4,000 6,000 47,430 53,430 $82,020 2,000 4,000 6,000 36, 390 42,390 $71, 340 Last Year $66,000 39,000 27,000 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $73,000 Cost of goods sold 36,000 Gross margin 37,000 Selling and administrative expenses: Selling expenses 10,800 Administrative expenses 6,500 Total selling and administrative expenses 17,300 Net operating income 19,700 Interest expense 900 Net income before taxes 18,800 Income taxes 7,520 Net income 11,280 Dividends to common stockholders 240 Net income added to retained earnings 11,040 Beginning retained earnings 36,390 Ending retained earnings $47,430 10,500 6,600 17,100 9,900 900 9,000 3,600 5,400 450 4,950 31,440 $36,390 Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. (For all requirements, round your answers to 2 decimal places.) 1. 2. Times interest earned ratio Debt-to-equity ratio Equity multiplier 3
