Exercise 14-6 (Algo) Financial Ratios for Assessing Market Performance [LO14-6] Comparative financial statements for Weller Corporation,...

Transcribed Image Text:

Exercise 14-6 (Algo) Financial Ratios for Assessing Market Performance [LO14-6] 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 960,000 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 $26.00. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet This Year Last Year 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 (dollars in thousands) 16,000 10,500 $ 2,036 $ 3,820 9,ese 8,840 1,968 2,428 23,330 7,600 20,600 7.600 20,800 28,400 28,200 $ 51,530 $ 9,100 $ 11,100 920 460 1,500 460 12,488 11,060 6,250 18,730 6,250 17,310 968 968 5,000 5,000 5,960 5,960 Retained earnings Total stockholders' equity 40,166 Total liabilities and stockholders' equity $ 58,896 $ 51,530 28,260 34,220 Sales Cost of goods sold Gross margin Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings Required: Compute the following financial data for this year: 1. Earnings per share. (Round your answer to 2 decimal places.) This Year Last Year $ 95,000 $ 90,000 60,000 56,000 35,000 34,000 10,100 9,600 13,600 12,600 23,700 22,200 11,300 11,800 750 750 10,550 11,050 4,220 4,420 6,330 6,630 768 5,946 28,260 5,862 22,398 $ 34,206 $ 28,260 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.) 1. Earnings per share 2. Price-earnings ratio 3. Dividend payout ratio 4. Dividend yield ratio 96 96 5. Book value per share Alt Text: A screenshot of a computer Approve Edit End of document Exercise 14-6 (Algo) Financial Ratios for Assessing Market Performance [LO14-6] 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 960,000 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 $26.00. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet This Year Last Year 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 (dollars in thousands) 16,000 10,500 $ 2,036 $ 3,820 9,ese 8,840 1,968 2,428 23,330 7,600 20,600 7.600 20,800 28,400 28,200 $ 51,530 $ 9,100 $ 11,100 920 460 1,500 460 12,488 11,060 6,250 18,730 6,250 17,310 968 968 5,000 5,000 5,960 5,960 Retained earnings Total stockholders' equity 40,166 Total liabilities and stockholders' equity $ 58,896 $ 51,530 28,260 34,220 Sales Cost of goods sold Gross margin Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings Required: Compute the following financial data for this year: 1. Earnings per share. (Round your answer to 2 decimal places.) This Year Last Year $ 95,000 $ 90,000 60,000 56,000 35,000 34,000 10,100 9,600 13,600 12,600 23,700 22,200 11,300 11,800 750 750 10,550 11,050 4,220 4,420 6,330 6,630 768 5,946 28,260 5,862 22,398 $ 34,206 $ 28,260 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.) 1. Earnings per share 2. Price-earnings ratio 3. Dividend payout ratio 4. Dividend yield ratio 96 96 5. Book value per share Alt Text: A screenshot of a computer Approve Edit End of document