Comparative financial statements for Weller Corporation, a merchandising company
ID: 2477033 • Letter: C
Question
Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 920,000 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 $0.40. The market value of the company’s common stock at the end of the year was $24.00. All of the company’s sales are on account.
Earnings per share? (Round your answer to 2 decimal places.)
Price-earnings ratio? (Round your intermediate calculations and final answer to 2 decimal places.)
Dividend payout ratio?(Round your intermediate calculations and final answer to 2 decimal places.)
Dividend yield ratio? (Round your intermediate calculations and final answer to 2 decimal places.)
Book value per share? (Round your answer to 2 decimal places.)
Weller CorporationComparative Balance Sheet
(dollars in thousands) This Year Last Year Assets Current assets: Cash $ 2,772 $ 2,930 Accounts receivable, net 15,600 10,350 Inventory 10,300 8,680 Prepaid expenses 1,920 2,340 Total current assets 30,592 24,300 Property and equipment: Land 7,200 7,200 Buildings and equipment, net 20,400 20,200 Total property and equipment 27,600 27,400 Total assets $ 58,192 $ 51,700 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 10,700 $ 8,900 Accrued liabilities 840 1,300 Notes payable, short term 420 420 Total current liabilities 11,960 10,620 Long-term liabilities: Bonds payable 7,500 7,500 Total liabilities 19,460 18,120 Stockholders' equity: Common stock 920 920 Additional paid-in capital 4,800 4,800 Total paid-in capital 5,720 5,720 Retained earnings 33,012 27,860 Total stockholders' equity 38,732 33,580 Total liabilities and stockholders' equity $ 58,192 $ 51,700
Comparative Income Statement and Reconciliation
(dollars in thousands) This Year Last Year Sales $ 91,000 $ 86,000 Cost of goods sold 58,000 54,000 Gross margin 33,000 32,000 Selling and administrative expenses: Selling expenses 9,700 9,200 Administrative expenses 13,200 12,200 Total selling and administrative expenses 22,900 21,400 Net operating income 10,100 10,600 Interest expense 900 900 Net income before taxes 9,200 9,700 Income taxes 3,680 3,880 Net income 5,520 5,820 Dividends to common stockholders 368 368 Net income added to retained earnings 5,152 5,452 Beginning retained earnings 27,860 22,408 Ending retained earnings $ 33,012 $ 27,860
Earnings per share? (Round your answer to 2 decimal places.)
Price-earnings ratio? (Round your intermediate calculations and final answer to 2 decimal places.)
Dividend payout ratio?(Round your intermediate calculations and final answer to 2 decimal places.)
Dividend yield ratio? (Round your intermediate calculations and final answer to 2 decimal places.)
Book value per share? (Round your answer to 2 decimal places.)
Explanation / Answer
Earnings per share=Net Income/Average outstanding shares Net Income $5,520,000 Average No. of Outstanding shares 920,000 Earnings per share =$5,520,000/920,000 $ 6.00 Price Earning Ratio =Market vaue per share/Earnings per share =$24.00/$6.00 4 times Price Earning Ratio 4 Dividend payout ratio Dividend per share/Earning per share =$0.40/$6.00 0.07 7% Dividend yield ratio Dividend per share/market value per share Dividend per share $0.40 Market price per share $24 Dividend yield ratio =$0.40/$24 0.02 2% Book value per ratio Total shareholders equity/Total outstanding shares Total shareholders equity ('000) $38,732 Total outstanding shares ('000) 920 Book value per share $ 42.10
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