Exercise 16-2 (Algo) Financial Ratios for Assessing Liquidity [LO16-2] Comparative financial statements for Weller Corporation, a...

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Exercise 16-2 (Algo) Financial Ratios for Assessing Liquidity [LO16-2] 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 $0.75 last year and $0.40 this year. The market value of the company's common stock at the end of this year was $24. 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 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 Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 1,260 10,600 12,200 770 $ 1,320 7,200 11,800 530 24,830 20,850 9,900 9,900 42,303 37,744 52,203 47,644 $ 77,033 $ 68,494 $18,800 $18,800 930 800 120 120 19,850 19,720 9,100: 9,100 28,950 28,820 700 700 4,000 4,000 4,700 4,700 43,383 34,974 48,083 39,674 $ 77,033 $ 68,494 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 75,000 $65,000 Cost of goods sold 41,000 40,000 Gross margin 34,000 25,000 Selling and administrative expenses: Selling expenses 11,200 10,500 Administrative expenses 7,000 6,400 Total selling and administrative expenses 18,200 16,900 Net operating income 15,800 8,100 Interest expense 910 910 Net income before taxes 14,890 7,190 Income taxes 5,956 2,876 Net income 8,934 4,314 Dividends to common stockholders 525 280 Net income added to retained earnings 8,409 4,034 Beginning retained earnings 34,974 30,940 Ending retained earnings $ 43,383 $ 34,974 Required: Compute the following financial data and ratios for this year: 1. Working capital. Note: Enter your answer in thousands. 2. Current ratio. Note: Round your answer to 2 decimal places. 3. Acid-test ratio. Note: Round your answer to 2 decimal places. 1. Working capital 2. Current ratio 3. Acid-test ratio Exercise 16-2 (Algo) Financial Ratios for Assessing Liquidity [LO16-2] 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 $0.75 last year and $0.40 this year. The market value of the company's common stock at the end of this year was $24. 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 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 Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 1,260 10,600 12,200 770 $ 1,320 7,200 11,800 530 24,830 20,850 9,900 9,900 42,303 37,744 52,203 47,644 $ 77,033 $ 68,494 $18,800 $18,800 930 800 120 120 19,850 19,720 9,100: 9,100 28,950 28,820 700 700 4,000 4,000 4,700 4,700 43,383 34,974 48,083 39,674 $ 77,033 $ 68,494 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 75,000 $65,000 Cost of goods sold 41,000 40,000 Gross margin 34,000 25,000 Selling and administrative expenses: Selling expenses 11,200 10,500 Administrative expenses 7,000 6,400 Total selling and administrative expenses 18,200 16,900 Net operating income 15,800 8,100 Interest expense 910 910 Net income before taxes 14,890 7,190 Income taxes 5,956 2,876 Net income 8,934 4,314 Dividends to common stockholders 525 280 Net income added to retained earnings 8,409 4,034 Beginning retained earnings 34,974 30,940 Ending retained earnings $ 43,383 $ 34,974 Required: Compute the following financial data and ratios for this year: 1. Working capital. Note: Enter your answer in thousands. 2. Current ratio. Note: Round your answer to 2 decimal places. 3. Acid-test ratio. Note: Round your answer to 2 decimal places. 1. Working capital 2. Current ratio 3. Acid-test ratio