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Please show workings, and thank you! Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company
Please show workings, and thank you!
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 bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company's common stock at the end of the year was $27. 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 Accounts receivable, net Inventory Prepaid expenses $ 1,160 $ 1,310 9,700 8,300 13,100 12,000 740580 Total current assets 24,700 22,190 Property and equipment: Land Buildings and equipment, net 10,100 53,064 10,100 41,592 Total property and equipment 63,164 $87,864 51,692 $ 73,882 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term $19,400 $ 18,800 980850 260 O 20,380 19,910 Total current liabilities Long-term liabilities: Bonds payable 8,800 8,800 Total liabilities 29,180 28,710 Stockholders' equity: Common stock Additional paid-in capital 2,000 4,000 2,000 4,000 Total paid-in capital Retained earnings 6,000 52,684 6,000 39,172 Total stockholders' equity 58,684 45,172 Total liabilities and stockholders' equity $87,864 $ 73,882 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $75,000 $64,000 Cost of goods sold 33,000 32,000 Gross margin 42,000 32,000 Selling and administrative expenses: Selling expenses Administrative expenses 10,900 7,300 10,300 6,100 Total selling and administrative expenses 18,200 16,400 Net operating income Interest expense 23,800 880 15,600 880 Net income before taxes Income taxes 22,920 9,168 14,720 5,888 Net income Dividends to common stockholders 13,752 240 8,832 600 Net income added to retained earnings Beginning retained earnings 13,5128,232 39,172 30,940 Ending retained earnings $52,684 $ 39,172 Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. (Round your answer to 1 decimal place.) Times interest earned ratio 2. Debt-to-equity ratio. (Round your answer to 2 decimal places.) Debt-to-equity ratio 3. Equity multiplier. (Round your answer to 2 decimal places.) Equity multiplierStep by Step Solution
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