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 bond payable was 12%, 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 $18. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,280 12,300 9,700 1,800 25,080 $ 1,560 9,100 8,200 2,100 20,960 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 6,000 19,200 25, 200 $50,280 6,000 19,000 25,000 $45,960 $ 9,500 600 300 10,400 $ 8,300 700 300 9,300 5,000 15,400 5,000 14,300 800 4.200 800 4 200

Answer 1

1. Accounts receivables turnover = 7.38 times

2. Average collection period = 49.46 days

3. Inventory turnover= 8950 dollars

4. Average sales period = 62.82 days

5. Operating cycle = 112.28 days

6. Total assets turnover ratio = 1.64 times

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