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 800,000 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. All of the company's sales are on account Weller Corporatí Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets Cash Accounts receivable, net Inventory Prepaid expenses 1,2802,560 9,100 8,200 ,8002,100 12,300 9,700 Total current assets Propetty and equipmenti rint Land 6·000 200 aui ldinga and equipment, net Total property and equipment Total assets Liabilities and stoekholders' Equity Current liabliitiess 6,000 19.000 25,200-25, 000 50.280$45.960 - Accounta payable Accrued Labslitses s 9.500$ 8,300 700 Notes payable, short term Total current 1iabilities Long-term 1lab:litiess 600 300 10.400 300 9,300 Bonds payable Zotal 1iabilitles Stockbolders eguity 5,000 15,400 Common stock 800 800 dastionsi etid-ia eapita Total paid-in copital Retained earnibg total stoekholders eqait tocal Iiabilities and stockhoideza equity s,000 5,000 26.60 291 880 . $50.280$45,960

Explanation / Answer

Workings:

1 Gross margin percentage 34.2 % 2 Net profit margin percentage 4.5 % 3 Return on total assets 7.4 % 4 Return on equity 10.64 %

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