Please Help!!!!!!!!!!!! Comparative financial statements for Weller Corporation,
ID: 2472842 • Letter: P
Question
Please Help!!!!!!!!!!!!
Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal ye 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 $1.00 last year and $0.65 this year. The market value of the company's common stock at the end of year was $25. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets Cash Accounts receivable, net Inventory Prepaid expenses $ 1,260 1,380 8,300 12.300 11700 520 10,400 650 Total current assets 24,610 21,900 Property and equipment: Land 9,200 9,200 Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity 48,432 37,438 57,632 46,638 $82,242 $68,538 Current liabilities Accounts payable Accrued liabilities $19,900 $17,900 860 290 1,050 290 Notes payable, short term Total current liabilities Long-term liabilities 21,240 19,050 8,200 8,200 29,440 27,250 Bonds payable Total liabilities Stockholders' equity: 600 Common stock Additional paid-in capital 600 4,000 4,000 Total paid-in capital Retained earnings 4,600 4,600 48,202 36,688 52,802 41,288 $82,242 $68,538 Total stockholders' equity Total liabilities and stockholders' equity Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)Explanation / Answer
1. Accounts Receivable turnover = Turnover (Sales) / Average Accounts receivable
= 80410 / (10400 + 8300/ 2) = 80410 /9350 = 8.60
2. Average collection period = Accounts Receivable * 365 / On account sales = 10400 * 365 / 80410 = 47.21 days
3. Inventory turnover = cost of goods sold / average inventory = 40800 / (12300 + 11700/ 2) = 40800/12000 = 3.40
4. Average sale period = 365 / Inventory turnover = 365 / 3.4 = 107.35 days
5. Operating cycle=365 * average inventory / purchases + 365 * average accounts receivables / On Account Sales
= 365 * 12000 /40800 + 365 * 9350 / 80410 = 149.80 days
6. Total Asset Turnover = sales / average total assets = 80410 / (82242+68538/2) = 1.07 times