Homework answers / question archive / Exercise 16-3 (Algo) Financial Ratios for Asset Management (L016-3) Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below

Exercise 16-3 (Algo) Financial Ratios for Asset Management (L016-3) Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below

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Exercise 16-3 (Algo) Financial Ratios for Asset Management (L016-3) 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 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company's common stock at the end of this year was $26. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,210 18,500 12,200 610 24,520 $ 1,380 7,700 12,200 650 21,930 9,500 53,046 62,546 $87,066 9,500 39,706 49,206 $71,136 Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $19,600 1,020 280 20,980 $19,480 860 280 20.540 9,480 30,380 29,940 680 4,000 4,600 52,166 56,766 $87,066 600 4,000 4,600 36,596 41, 196 $71,136 Weller Corporation Comparative Incone Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $82,810 $66,000 Cost of goods sold 37,820 38,000 Gross margin 44,990 28,000 Selling and administrative expenses: Selling expenses 19,900 10,500 Administrative expenses 6,880 6,800 Total selling and administrative expenses 17,700 17,380 Net operating income 27,299 10,700 Interest expense 940 940 Net income before taxes 26,350 9,760 Income taxes 1e, 540 3,904 Net Income 15,810 5,856 Dividends to common stockholders 240 600 Net Income added to retained earnings 15,570 5,256 Beginning retained earnings 36,596 31,340 Ending retained earnings $52,166 $36,596 Required: Compute the following financial data for this year: 1. Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.) 2. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 3. Inventory turnover. (Round your answer to 2 decimal places.) 4. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 5. Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.) 6. Total asset turnover. (Round your answer to 2 decimal places.) days 1. Accounts receivable tumover Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle 6. Total asset turnover days