Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal 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 bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $.75. The market value of the company’s common stock at the end of the 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 $ 1,160 $ 1,270

Accounts receivable, net 9,500 8,000

Inventory 12,100 12,400

Prepaid expenses 730 660

Total current assets 23,490 22,330

Property and equipment:

Land 10,200 10,200

Buildings and equipment, net 43,324 40,027

Total property and equipment 53,524 50,227

Total assets $ 77,014 $ 72,557

Liabilities and Stockholders' Equity Current liabilities:

Accounts payable $ 18,800 $ 18,800

Accrued liabilities 1,060 850

Notes payable, short term 0 190

Total current liabilities 19,860 19,840

Long-term liabilities:

Bonds payable 9,300 9,300

Total liabilities 29,160 29,140

Stockholders' equity:

Common stock 2,000 2,000

Additional paid-in capital 4,000 4,000

Total paid-in capital 6,000 6,000

Retained earnings 41,854 37,417

Total stockholders' equity 47,854 43,417

Total liabilities and stockholders' equity $ 77,014 $ 72,557

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)

This Year Last Year

Sales $ 69,000 $ 66,000

Cost of goods sold 41,000 36,000

Gross margin 28,000 30,000

Selling and administrative expenses:

Selling expenses 11,400 10,200

Administrative expenses 7,400 6,700

Total selling and administrative expenses 18,800 16,900

Net operating income 9,200 13,100

Interest expense 930 930

Net income before taxes 8,270 12,170

Income taxes 3,308 4,868

Net income 4,962 7,302

Dividends to common stockholders 525 525

Net income added to retained earnings 4,437 6,777

Beginning retained earnings 37,417 30,640

Ending retained earnings $ 41,854 $ 37,417

Required: Compute the following financial ratios for this year:

1. Times interest earned ratio. (Round your answer to 1 decimal place.)

2. Debt-to-equity ratio. (Round your answer to 2 decimal places.)

3. Equity multiplier. (Round your answer to 2 decimal places.)