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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

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

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 bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock at the end of the year was $28. All of the company’s sales are on account.

 

(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.)

 
manish jayant 07-Sep-2020

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