Comparative financial statements for Weller Corporation, a merchandising company

Question

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 810,000 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 $18.50. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets S 2,546 2,770 9.150 9,7508,240 1,810 2,120 Accounts receivable, net 12,400 Prepaid expenses Total current assets 26,506 22,280 Property and equipment 6,100 6,100 Land Buildings and equipment, net 19.300 19.100 25,400 25,200 $51,906 $47,480 Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities S 9.600 S 8,350 750 310 620 310 Notes payable, short term 9,410 6,250 6,250 16,780 15,660 Total current liabilities Long-term liabilities 10,530 Bonds payable Total liabilities Stockholders' equity: 810 4,250 810 Common stock Additional paid-in capital 4,250 Total paid-in capital Retained earnings 5,060 5,060 30,066 26.760 35,126 31,820 $51,906 $47,480 Total stockholders' equity Total liabilities and stockholders equity

Explanation / Answer

Req 1: Earning per share Net income for common stockholder 3630 Divide: Average numer of common shares 810 Earning per share 4.48 Req 2: Price earning ratio Market price per share 18.5 Divide: earning per share 4.48 Price earning ratio 4.13 Req 3: Dividend payout ratio: Dividend per share (324/810) 0.4 Divide: Earning per share 4.48 Dividend pay out 8.93% Req 4: Dividend Yield ratio: Dividend per share (324/810) 0.4 Divide: Market price per share 18.5 Dividend pay out 2.16% Req 5. Book value per share: Total Stockcholder's equity at the end of year 35126 Divide: Number of shares 810 Book value per share: 43.37

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