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) |
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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) |
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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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