Exercise $16-2($Algo$)$ Financial Ratios for Assessing Liquidity $[$LO$16-2]$

Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December $31$ appear below. The company did not issue any common stock during the year. A total of $700,000$ 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 $$0\mathrm{.}75$ last year and $$0\mathrm{.}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

Assets

Current assets:

Cash $ $1,160$ $ $1,330$

Accounts receivable, net $9,0008,200$

Inventory $12,00011,200$

Prepaid expenses $730550$

Total current assets $22,89021,280$

Property and equipment:

Land $10,00010,000$

Buildings and equipment, net $46,26740,686$

Total property and equipment $56,26750,686$

Total assets $ $79,157$ $ $71,966$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ $19,300$ $ $18,200$

Accrued liabilities $950760$

Notes payable, short term $260260$

Total current liabilities $20,51019,220$

Long$-$term liabilities:

Bonds payable $9,9009,900$

Total liabilities $30,41029,120$

Stockholders' equity:

Common stock $700700$

Additional paid$-$in capital $4,0004,000$

Total paid$-$in capital $4,7004,700$

Retained earnings $44,04738,146$

Total stockholders' equity $48,74742,846$

Total liabilities and stockholders' equity $ $79,157$ $ $71,966$

Weller Corporation

Comparative Income Statement and Reconciliation

$($dollars in thousands$)$

This Year Last Year

Sales $ $66,000$ $ $64,000$

Cost of goods sold $36,00033,000$

Gross margin $30,00031,000$

Selling and administrative expenses:

Selling expenses $11,50010,800$

Administrative expenses $6,8006,400$

Total selling and administrative expenses $18,30017,200$

Net operating income $11,70013,800$

Interest expense $990990$

Net income before taxes $10,71012,810$

Income taxes $4,2845,124$

Net income $6,4267,686$

Dividends to common stockholders $525280$

Net income added to retained earnings $5,9017,406$

Beginning retained earnings $38,14630,740$

Ending retained earnings $ $44,047$ $ $38,146$

Required:

Compute the following financial data and ratios for this year:

Working capital.

Note: Enter your answer in thousands.

Current ratio.

Note: Round your answer to $2$ decimal places.

Acid$-$test ratio.

Note: Round your answer to $2$ decimal places.