ezto.mheducation.com UrbanSitter Chegg.com Comparative financial statements for
ID: 2574106 • Letter: E
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ezto.mheducation.com UrbanSitter Chegg.com 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 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 $0.40 this year. The market value of the company's common stock at the end of the year was $20. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet dollars in thousands) This Year Last Year Assets Current assets: Accounts receivable, net Inventory Prepaid expenses $ 1,250 $ 1,290 9,900 7,800 13,600 11,200 600 690 Total current assets 25,440 20,890 Property and equipment: Land 10,200 10,200 Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity 45,146 41,248 55,346 51,448 $80,786 $72,338 Current liabilities Accounts payable Accrued liabilities $19,700 $19,400 780 1,060 Notes payable, short term Total current liabilities Long-term liablities Bonds payable 20,760 20,430 8,700 8,700 29,460 29,130 Total liabilities Stockholders'equity: Common stock 2,000 2,000 Additional paid-in capital 4,000 4,000 Total paid-in capital Retained earnings 6,000 6,000 45,326 37,208 51,326 43,208 $80,786 $72,338 Total stockholders' equity Total liabilities and stockholders equityExplanation / Answer
Answer 1.
Times interest Earned Ratio = EBIT/ Iterset Expenses Earned
Cureent year EBIT is 15300 and Interest expenses is 870
therefore Time interest Earned ratio is 15300/870= 17.59 approx
Last year EBIT was 12400 and interest expenses was 870
Therefore Time Interest Earned ratio is 12400/870 = 14.25
Ans. 2.
Debt-equity Ratio. Total Liabilities/Total equity
Current year:
Total Equity Fund: 51326
Total libilities: 29460
Therefore Debt equity 29460/51326= .57 approx
Last Year:
Total Equity Fund is 43208 and total liabilities is 29130
Therefore Debt-Equity ratio of last year is: 29130/43208=0.67 approx.
Ans 3.
Equity Multiplier = Total assest/stock holder Equity
Current year
Total assets: 80786 and total Equity is 51326
Therefore Equity multiplier = 80786/51326= 1.57 Approx.
Last Year:
Total Assest is 72338 and Total Equity is 43208
Therefore Equity Multiplier is 72338/43208=1.67 Approx.
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