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i am confused by the amounts given in the heading. Is that to throw me off? Please advise. I on number 5 but worried i
i am confused by the amounts given in the heading. Is that to throw me off? Please advise. I on number 5 but worried i missed out on using the numbers in the opening info.
Problem 13-4A Calculating financial statement ratios LO P3 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, $53,900; total assets, $179,400; common stock, $86,000; and retained earnings, $40,680.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 450,600 Cost of goods sold 297,650 Gross profit 152,950 Operating expenses 99,500 Interest expense 4,100 Income before taxes 49,350 Income tax expense 19,880 Net income $ 29, 470 $ $ Assets Cash Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity 12,000 Accounts payable 9,200 Accrued wages payable 33,600 Income taxes payable 42,150 Long-term note payable, secured by mortgage on plant assets 2,800 Common stock 148,300 Retained earnings $ 248,050 Total liabilities and equity 17,500 3,000 3,000 68,400 Prepaid expenses Plant assets, net Total assets 86,000 70,150 $ 248,050 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 Req 3 Reg 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the debt-to-equity ratio. (6) 1 Choose Numerator: Total liabilities $ Debt-to-Equity Ratio Choose Denominator: Total equity = Debt-to-Equity Ratio Debt-to-equity ratio 0 to 1 91,900 / =
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