Comparative financial statements for Weller Corporation, a merchandising company

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 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 $0.50. The market value of the company’s common stock at the end of the year was $26. All of the company’s sales are on account.

Working capital.

Current ratio. (Round your answer to 2 decimal places.)

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 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 $0.50. The market value of the company’s common stock at the end of the year was $26. All of the company’s sales are on account.

Explanation / Answer

1 Working capital =   Total current assets -Total current liabilities = 26330-20090= 6240 2 Current ratio =   Total current assets/Total current liabilities = 26330/20090= 1.31 3 Acid-test ratio=(26330-13900-660)/20090= 0.59

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