Selected year- end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $ 48,900; total assets, $ 189,400; common stock, $ 90,000; and retained earnings, $ 22,748.)

CABOT CORPORATION

Income Statement

For Year Ended December 31, 2013

Sales . . . . . . . . . . . . . . . . . . . . . . $ 448,600

Cost of goods sold . . . . . . . . . . 297,250

Gross profit . . . . . . . . . . . . . . . . 151,350

Operating expenses . . . . . . . . . 98,600

Interest expense . . . . . . . . . . . . 4,100

Income before taxes . . . . . . . . . 48,650

Income taxes . . . . . . . . . . . . . . . 19,598

Net income . . . . . . . . . . . . . . . . $ 29,052

Required
Compute the following:
(1) Current ratio,
(2) Acid- test ratio,
(3) Days’ sales uncollected,
(4) Inventory turn-over,
(5) Days’ sales in inventory,
(6) Debt-to-equity ratio,
(7) Times interest earned,
(8) Profit margin ratio,
(9) Total asset turnover,
(10) Return on total assets,
(11) Return on common stockholders’ equity.
Round to one decimal place, except for part 6 round to twodecimals.

Transcribed Image Text:

CABOT CORPORATION Balance Sheet December 31,2013 Assets Cash 10000 Accounts payable .. Short-term investments ···.. Accounts receivable, net.....29.200 Income taxes payable Notes receivable (trade)*.. Merchandise inventory3 Prepaid expenses2.650 Plant assets, net Total assets... Liabilities and Equity .. 17,500 3,200 3,300 8,400 Accrued wages payable .... 4,500 32,150 by mortgage on plant assets Long-term note payable, secured 63.400 90,000 62,800 Total liabilities and equity.. ..$240,200 ..53,300 Retained earni