Exercise 14-2 (Algo) Financial Ratios for Assessing Liquidity (L014-2] 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 $23. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Assets Last Year current assetat Cash $ 1,200 $ 1.390 Accounts receivable, net Inventory 9,800 6,700 13,300 Prepaid expenses 11,900 620 610 Total current assets 24,920 Property and equipment 20, 600 Land Buildings and equipment, net 10,100 10.100 14,588 Total property and equipment 37,594 54,600 47.694 Total assets $ 79.608 $ 68,294 Liabilities and stockholders' Equity Current liabilities Accounts payable $ 20,000 $ 18,100 Accrued liabilities 980 890 Notes payable, short term 210 210 Total current liabilities 21.190 19,200 Long-term liabilities Bonds payable 9,100 .100 Total liabilities 30,290 28.300 stockholders' equity Common stock 600 600 Additional paid in capital 4.000 Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,200 9,800 13,300 620 24,920 $ 1,390 6,700 11,900 610 20,600 10,100 44,588 54,688 $ 79,608 10,100 37,594 47,694 $ 68,294 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 $ 20,000 980 210 21,190 $ 18, 100 890 210 19,200 9, 100 30,290 9,1%. 28,300 600 4,000 4,600 44,718 49,318 $ 79,608 600 4,000 4,600 35,394 39,994 $ 68,294 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year $ 73,000 38,000 35,000 Sales Cost of goods sold Gross margin Last Year $ 64,000 38,000 26,000 UL. OLULAULU SYAL Total liabilities and stockholders' equity AV $ 79,608 $ 68,294 Last Year $ 64,000 38,000 26,000 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $ 73,000 Cost of goods sold 38,000 Gross margin 35,000 Selling and administrative expenses : Selling expenses 10,700 Administrative expenses 7,100 Total selling and administrative expenses 17,800 Net operating income 17,200 Interest expense 910 Net income before taxes 16,290 Income taxes 6,516 Net income 9,774 Dividends to common stockholders 450 Net income added to retained earnings 9,324 Beginning retained earnings 35,394 Ending retained earnings $ 44,718 10,800 6,300 17,100 8,900 910 7,990 3,196 4,794 240 4,554 30,840 $ 35,394 Required: Compute the following financial data and ratios for this year: 1. Working capital (Enter your answer in thousands.) 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio. (Round your answer to 2 decimal places.) 1. Working capital 2. Current ratio 3. Acid-test ratio