Chegg.com UrbanSitter Comparative financial statements for Weller Corporation, a
ID: 2574083 • Letter: C
Question
Chegg.com UrbanSitter 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 600,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. 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 $27. 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 1,150 $1,390 9,400 7,800 3,400 11,300 630 550 Total current assets 24,580 21,040 Property and equipment: Land 10,500 10,500 Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity 50,833 40,676 61,333 51,176 $85,913 $72,216 Current liabilities: Accounts payable Accrued liabilities Notes payable, short term $19,900 $19,200 730 160 1,070 160 21,130 20,090 9,400 9,400 30,530 29,490 Total current liabilities Long-term liablities Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital 600 600 4,000 4,000 Total paid-in capital Retained eamings Total stockholders' equity 4,600 4,600 50,783 38,126 55,383 42,726 $85,913 $72,216 Total liabilities and stockholders' equityExplanation / Answer
Ratio Analysis
Accounts receivable turnover
sales/(average accounts receivables)
9.2
sales
79120
average accounts receivables
(9400+7800)/2
8600
Average collection period in days
365/accounts receivable turnover ratio
39.67
Accounts receivable turnover
9.2
inventory turnover ratio
cost of goods sold/average inventory
3.1
cost of goods sold
38285
average inventory
(13400+11300)/2
12350
Average sales period
365/inventory turnover ratio
117.74
inventory turnover ratio
3.1
operating cycle
accounts receivable collection period + days sales in inventory
157.42
Average sales period
117.74
Average collection period in days
39.67
total asset turnover
sales/average total assets
1.00
sales
79120
average assets
(85913+72216)/2
79064.5
Ratio Analysis
Accounts receivable turnover
sales/(average accounts receivables)
9.2
sales
79120
average accounts receivables
(9400+7800)/2
8600
Average collection period in days
365/accounts receivable turnover ratio
39.67
Accounts receivable turnover
9.2
inventory turnover ratio
cost of goods sold/average inventory
3.1
cost of goods sold
38285
average inventory
(13400+11300)/2
12350
Average sales period
365/inventory turnover ratio
117.74
inventory turnover ratio
3.1
operating cycle
accounts receivable collection period + days sales in inventory
157.42
Average sales period
117.74
Average collection period in days
39.67
total asset turnover
sales/average total assets
1.00
sales
79120
average assets
(85913+72216)/2
79064.5
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