Question

Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...

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 920,000 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 $0.75 last year and $0.40 this year. The market value of the company’s common stock at the end of the year was $24.00. 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 $ 2,772 $ 2,930
Accounts receivable, net 15,600 10,350
Inventory 10,300 8,680
Prepaid expenses 1,920 2,340
Total current assets 30,592 24,300
Property and equipment:
Land 7,200 7,200
Buildings and equipment, net 20,400 20,200
Total property and equipment 27,600 27,400
Total assets $ 58,192 $ 51,700
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 10,700 $ 8,900
Accrued liabilities 840 1,300
Notes payable, short term 420 420
Total current liabilities 11,960 10,620
Long-term liabilities:
Bonds payable 7,500 7,500
Total liabilities 19,460 18,120
Stockholders' equity:
Common stock 920 920
Additional paid-in capital 4,800 4,800
Total paid-in capital 5,720 5,720
Retained earnings 33,012 27,860
Total stockholders' equity 38,732 33,580
Total liabilities and stockholders' equity $ 58,192 $ 51,700
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
This Year Last Year
Sales $ 91,000 $ 86,000
Cost of goods sold 58,000 54,000
Gross margin 33,000 32,000
Selling and administrative expenses:
Selling expenses 9,700 9,200
Administrative expenses 13,200 12,200
Total selling and administrative expenses 22,900 21,400
Net operating income 10,100 10,600
Interest expense 900 900
Net income before taxes 9,200 9,700
Income taxes 3,680 3,880
Net income 5,520 5,820
Dividends to common stockholders 368 736
Net income added to retained earnings 5,152 5,084
Beginning retained earnings 27,860 22,776
Ending retained earnings $ 33,012 $ 27,860

Required:

Compute the following financial data for this year:

1. Earnings per share. (Round your answer to 2 decimal places.)

2. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

4. Dividend yield ratio. (Round your answer to 2 decimal places.)

5. Book value per share. (Round your answer to 2 decimal places.)

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