Comparative financial statements for Weller Corporation a me

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 700,000 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 $23. All of the company’s sales are on account.

Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.)

Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.)

Inventory turnover. (Round your answer to 2 decimal places.)

PART4.

Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.)

Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.)

Total asset turnover. (Round your answer to 2 decimal places.)

Weller Corporation Comparative Balance Sheet (dollars in thousands)
	This Year	Last Year
Assets
Current assets:
Cash	$	1,190		$	1,230
Accounts receivable, net		9,400			7,900
Inventory		12,700			11,700
Prepaid expenses		680			700
Total current assets		23,970			21,530
Property and equipment:
Land		9,600			9,600
Buildings and equipment, net		54,064			39,061
Total property and equipment		63,664			48,661
Total assets	$	87,634		$	70,191
Liabilities and Stockholders\' Equity
Current liabilities:
Accounts payable	$	20,000		$	17,600
Accrued liabilities		920			870
Notes payable, short term		210			210
Total current liabilities		21,130			18,680
Long-term liabilities:
Bonds payable		9,900			9,900
Total liabilities		31,030			28,580
Stockholders\' equity:
Common stock		700			700
Additional paid-in capital		4,000			4,000
Total paid-in capital		4,700			4,700
Retained earnings		51,904			36,911
Total stockholders\' equity		56,604			41,611
Total liabilities and stockholders\' equity	$	87,634		$	70,191

Solution

1 Accounts receivable turnover = net credit sales /Average accounts receivable Net sales 80445 Beginning accounts receivable 7900 Ending accounts receivable 9400 Average accounts receivable 8650 Accounts receivable turnover 9.3 2 Days sales outstanding = 365 / accounts receivable tunover Days sales outstanding 39.2 Days 3 Inventory turnover = Cost of goods sold / Average inventory Cost of goods sold 36600 Beginning inventory 11700 Ending inventory 12700 Average inventory 12200 Average inventory = (Beginning + Ending )/2 Inventory turnover 3.0 4 Days sale in inventory = 365 / inventory turnover Days sales in inventory 121.7 Days 5 Operating cycle = days sales in inventory + average collection period Operating cycle 160.9 Days 6 Assets turnover ratio = Net sales / average total assets Net sales 80445 Beginning total assets 70191 Ending total assets 87634 Average total assets 78912.5 Assets turnover ratio 1.02