Problem 13-4A (Algo) 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, $49,900; total assets, $259,400; common stock, $88,000; and retained earnings, $32.948.) $ Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 14,000 Accounts payable 9,000 Accrued wages payable 30,600 Income taxes payable 38,150 Long-term note payable, secured by mortgage on plant assets 2,950 Common stock 148,300 Retained earnings $ 243,000 Total liabilities and equity 18,500 4,000 4,100 66,400 88,000 62,000 $ 243,000 CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 448,600 Cost of goods sold 296,950 Gross profit 151,650 Operating expenses 98,800 Interest expense 4,200 Income before taxes 48,650 Income tax expense 19,598 Net income $ 29,052 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 Req3 Reg 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the current ratio and acid-test ratio. (1) Choose Numerator: Current Ratio 1 Choose Denominator: 1 Current Ratio Current ratio 0 to 1 (2) Choose Numerator: Acid-Test Ratio 1 Choose Denominator: 1 = Acid-Test Ratio Acid-Test Ratio 0 to 1 1 I! Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Req 5 Req 6 Req 7 Req 8 Req9 Req 10 Req 11 Compute the days' sales uncollected. (3) Days' Sales Uncollected | Choose Denominator: Days Choose Numerator: Days Sales Uncollected Days sales uncollected 11 X 0 days Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Req 5 Reg 6 Req 7 Req 8 Req9 Reg 10 Req 11 Compute the inventory turnover. (4) Choose Numerator: Inventory Turnover 1 Choose Denominator: 1 Inventory Turnover Inventory turnover = / 0 times Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Reg 5 Req 6 Reg 7 Reg 8 Reg 9 Req 10 Req 11 Compute the days' sales in inventory. (5) Days' Sales in Inventory. Choose Denominator: Choose Numerator: X Days / X = Days' Sales in Inventory Days' sales in inventory 0 days 1 X Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req 4 Reg 5 Req 6 Req 7 Req 8 Req9 Req 10 Req 11 Compute the debt-to-equity ratio. (6) Debt-to-Equity Ratio | Choose Denominator: Choose Numerator: = 11 Debt-to-Equity Ratio Debt-to-equity ratio 0 to 1 = 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 Reg 8 Reg 9 Req 10 Reg 11 Compute the times interest earned. (7) Times Interest Earned Choose Numerator: 1 Choose Denominator: Times Interest Earned Times interest earned + 1 = 0 times Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Req 5 Req 6 Reg 7 Req 8 Req 9 Reg 10 Req 11 Compute the profit margin ratio. (8) Choose Numerator: Profit Margin Ratio I Choose Denominator: 1 11 Profit margin ratio Profit margin ratio 0 % Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 Req 6 Req 7 Reg 8 Req9 Req 10 Req 11 Compute the total asset turnover. (9) Choose Numerator: Total Asset Turnover I Choose Denominator: 1 II Total Asset Turnover Total asset turnover 11 / 0 times Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Req 5 Req 6 Reg 7 Req 8 Req9 Req 10 Req 11 Compute the return on total assets. (10) Choose Numerator: Return on Total Assets I Choose Denominator: 1 Return on Total Assets Return on total assets = II 0 % 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 Reg 8 Reg 9 Reg 10 Reg 11 Compute the return on common stockholders' equity. (11) Return 1 Common Stockholders' Equity Choose Denominator Choose Numerator: Return On Common Stockholders' Equity = Return on common stockholders' equity 0%