Required:

Compute the following financial ratios for this year:

1. Times interest earned ratio.

2. Debt-to-equity ratio.

3. Equity multiplier.

1.	Times interest earned ratio
2.	Debt-to-equity ratio
3.	Equity multiplier

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 $27. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,270 9,489 12,580 $ 1,380 6,700 10,780 680 19.380 629 23,79 9.4809 ,400 42,664 42.412 52.964 51,812 $75,854 $71, 192 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, 289 $19,500 1. 100 750 210 19,160 20,680 8. zee 28,980 8, 380 27,460 2. eee 4.980 6,989 49.954 46,954 $75,854 2, eee 4. Bee 6,eee 3 7,732 43,732 $71, 192 Last Year $65,000 35,000 30,eee Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $67,000 Cost of goods sold 43,000 Gross margin 24,eee Selling and administrative expenses: Selling expenses 10.8ee Administrative expenses 6,680 17,480 Net operating income 6,680 Interest expense Net income before taxes 5,770 Income taxes 2,388 Net income 3,462 Dividends to common stockholders Net income added to retained earnings 3,222 Beginning retained earnings 37,732 Ending retained earnings $40,954 18, 189 6,500 16,580 13,480 838 838 240 12.570 5,828 7,542 450 7,992 30,640 $37,732