Fe Edit View History Bookmarks Develop Wndow Helb Chapter 15 Homework Help Sa 3
ID: 2586698 • Letter: F
Question
Fe Edit View History Bookmarks Develop Wndow Helb Chapter 15 Homework Help Sa 3 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 700,000 shares of common stock were outstanding. The year and $0.40 this year. The market value of the company's common stock at the end of the year was S26. All of the company's sales are on account Wellez Corporation Comparative Salance Sheet dollars i thousands) $ 1,220 1,340 3.20012,00 Pzepaid expenser 740. ella.. Property and equipmenes ,000900 balldings and equipment net Total property and oquippent Liabilieies and stockholders Equity 18,700 18.100 coouets payable ocrued 11 Notea payable, short tere Total eurrent 1dabilities iabilities Bonds payable 8,900 8,90 Total liabil Stockholders equity Additional paid-in eapital Total paid-in capital Retained earnings fotal stockholders equity 44,707 38,803 50707 44 803 Prev 3015 Next 4Explanation / Answer
(Amount is in dollars in thousands)
1. Times Ineterst Earned Ratio
= Income before Interest and Income tax / Interest Expense
= 11,200 / 890
= 12.58 times
2. Debt Equity Ratio
= Total Debt / Total Equity
= 28,530 / 50,707
= 0.56
3. Equity Multiplier
= Average Total Assets / Average Stockholders Equity
Average Total Assets = (79,237 + 72,691) / 2
= 75,964
Average Stockholders Equity = (50,707 + 44,801) / 2
= 47,754
Equity Multiplier = 75,964 / 47,754
= 1.59
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