Che Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit: selected balance sheet amounts at December 31, 2016, were inventory, $55,900; total assets, $249,400; common stock, $80,000, and retained earnings. $54,510.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales $ 447,600 Cost of goods sold 297,450 Gross profit 150, 150 Operating expenses 99,400 Interest expense 4,800 Income before taxes 45,950 Income taxes 18,510 Net income $ 27,440 $ Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade)* Merchandise inventory CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity $ 20,000 Accounts payable 9,600 Accrued wages payable 33,600 Income taxes payable 7,500 30,150 Long-term note payable, secured by mortgage on plant assets 3,100 Common stock 152,380 Retained earnings $ 256,250 Total liabilities and equity 18,588 3,880 3,600 Prepaid expenses Plant assets, net Total assets 68,480 80,000 81,950 $ 256,250 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. (Do not round Intermediate calculations.) Prev 11 of 11 !!! Next 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) (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turr on common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Reg 1 and 2 Reg 3 Reg 4 Reg 5 Reg 6 Req 7 Reg 8 RE Compute the current ratio and acid-test ratio. Current Ratio 1 Sh Choose Denominator: Choose Numerator: = Current Ratio = Current ratio to 1 2017: (2) Choose Numerator: Acid-Test Ratio 1 Choose Denominator: - Acid-Test Ratio = Acid-Test Ratio 2017: Req 1 and 2 Reg 3 > Saved Merchandise inventory 68,400 Prepaid expenses Plant assets, net Total assets 30,150 Long-tern note payable, secured by mortgage on plant assets 3,100 Common stock 152,300 Retained earnings $ 256,250 Total liabilities and equity 80,000 81,950 $ 256,250 These are short-term notes receivable arising from customer (trade) sales. {equired: Compute the following: (1) current ratio, (2) acid-test ratio. (3) days' sales uncollected, (4) inventory turno 6) debt-to-equity ratio. 7) times interest earned. (8) profit margin ratio, (9) total asset turnover (10) 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 Req3 1 Rega | Reas Reg 4 Rego Rea> Req 7 Req8 Reas Reas Req 10 Compute the inventory turnover. Inventory Turnover Choose Denominator: Choose Numerator: - Inventory Turnover Inventory turnover inver o me 2017: times Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req 4 Reg 5 Reg 6 Req 7 Req 8 Req 9 Req 10 Compute the days' sales in inventory. (5) Choose Numerator: Days' Sales in Inventory Choose Denominator: x Days x X x - = = = Days' Sales In Inventory Days' sale Days' sales in inventory days 2017: Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Reg 5 Req 6 Req 7 Req 8 Req 9 Compute the debt-to-equity ratio. (6) Debt-to-Equity Ratio 1 Choose Denominator: Choose Numerator: = Debt-to-Equity Ratio Debt-to-equity ratio 2017: to 1 > Req 1 and 2 Req 3 Reg 4 Reg 5 Reg 6 Req 7 Req 8 H Req 9 Req 10 Re Compute the times interest earned. Times Interest Earned 1 Choose Denominator: Choose Numerator: Times Interest Earned Times interest eamed = 2017: times Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Reg 5 Reg 6 Req 7 Req 8 Req9 Compute the total asset turnover. (9) Total Asset Turnover Choose Denominator: Choose Numerator: - Total Asset Turnover Total asset tumover times 2017: S - omplete this question by entering your answers in the tabs below. 91 and 2 Reg 3 Req 4 Reg 5 Reg 6 Req 7 Req 8 Req9 Req 1 ompute the return on total assets. 40) Choose Numerator: Return on Total Assets Choose Denominator: - Return on Total Assets Return on total assets = 17: I Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 7 Req 8 Req 9 Rea Rea 10 Reg 10 Reg 11 Reg 11 Compute the return on common stockholders' equity. (11) Choose Numerator: 1 Return on Common Stockholders' Equity Choose Denominator = Return On Common Stockholders' Equity - Return on common stockholders' equity 2017:
