Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2015, 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, 2016

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

CABOT CORPORATION

Balance Sheet

December 31, 2016

* These are short-term notes receivable arising from customer (trade) sales.
Required
Compute the following:
(1) Current ratio,
(2) Acid-test ratio,
(3) Days' sales uncollected,
(4) Inventory turnover,
(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, and
(11) Return on common stockholders' equity. Round to one decimal place; for part 6, round to two decimals.

Transcribed Image Text:

Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade) Merchandise inventory Prepaid expenses.... Plant assets, net Total assets. Liabilities and Equity .10,000 Accounts payable.. 17,500 3,200 3,300 8,400 Accrued wages payable 29,200 Income taxes payable 4,500 Long-term note payable, secured by 32,150 2.650 Common stock mortgage on plant assets 63.400 90,000 62,800 $240,200 53,300 Retained earnings $240,200 Total liabilities and equity .