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 1,000,000 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 this year was $28.00. 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 $ 1,300 $ 1,610
Accounts receivable, net 16,400 9,250
Inventory 10,700 9,000
Prepaid expenses 2,000 2,500
Total current assets 30,400 22,360
Property and equipment:
Land 8,000 8,000
Buildings and equipment, net 21,200 21,000
Total property and equipment 29,200 29,000
Total assets $ 59,600 $ 51,360
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 11,500 $ 9,300
Accrued liabilities 1,000 1,700
Notes payable, short term 500 500
Total current liabilities 13,000 11,500
Long-term liabilities:
Bonds payable 5,000 5,000
Total liabilities 18,000 16,500
Stockholders' equity:
Common stock 1,000 1,000
Additional paid-in capital 5,200 5,200
Total paid-in capital 6,200 6,200
Retained earnings 35,400 28,660
Total stockholders' equity 41,600 34,860
Total liabilities and stockholders' equity $ 59,600 $ 51,360
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
This Year Last Year
Sales $ 99,000 $ 94,000
Cost of goods sold 62,000 58,000
Gross margin 37,000 36,000
Selling and administrative expenses:
Selling expenses 10,500 10,000
Administrative expenses 14,000 13,000
Total selling and administrative expenses 24,500 23,000
Net operating income 12,500 13,000
Interest expense 600 600
Net income before taxes 11,900 12,400
Income taxes 4,760 4,960
Net income 7,140 7,440
Dividends to common stockholders 400 800
Net income added to retained earnings 6,740 6,640
Beginning retained earnings 28,660 22,020
Ending retained earnings $ 35,400 $ 28,660

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 intermediate calculations and final answer to 2 decimal places.)

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

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