15 Problem 17-4A Calculating financial statement ratios LO P3 0.76 points Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $55,900; total assets, $179,400; common stock, $85,000; and retained earnings, $34,750.) eBook CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 453,600 Cost of goods sold 297,650 Gross profit 155, 950 Operating expenses 98,600 Interest expense 4,600 Income before taxes 52,750 Income tax expense 21,250 Net income $ 31,500 Print men References Assets Cash Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 10,000 Accounts payable 9,400 Accrued wages payable 32,400 Income taxes payable 38,150 Long-term note payable, secured by mortgage on plant assets 2,800 Common stock 152,300 Retained earnings $ 245,050 Total liabilities and equity $ 17,500 4,400 3,500 68,400 Prepaid expenses Plant assets, net Total assets 85,000 66,250 $ 245,050 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. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the current ratio and acid-test ratio. (1) Current Ratio Choose Numerator: Choose Denominator: = Current Ratio = Current ratio = to 1 (2) Acid-Test Ratio Choose Numerator: Choose Denominator: Acid-Test Ratio / II Acid-Test Ratio / II to 1 Req 1 and 2 Reg 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the days' sales uncollected. (3) Days' Sales Uncollected Choose Denominator: Days Choose Numerator: Days Sales Uncollected Days sales uncollected / days Req 1 and 2 Req 4 Req 1 and 2 Req 3 Reg 4 Req 5 Req 6 Reg 7 Req 8 Req 9 Req 10 Req 11 Compute the inventory turnover. (4) Inventory Turnover Choose Denominator: Choose Numerator: = Inventory Turnover Inventory turnover - II / times Req 1 and 2 Req 3 Reg 4 Req 5 Reg 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the return on common stockholders' equity. (11) Return on Common Stockholders' Equity Choose Denominator Choose Numerator: = Return On Common Stockholders' Equity Return on common stockholders' equity = / II %