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, $50,900; total assets, $169,400; common stock, $84,000; and retained earnings, $31,305.)

CABOT CORPORATION

Income Statement

For Current Year Ended December 31

Sales

$

455,600

Cost of goods sold

297,350

Gross profit

158,250

Operating expenses

98,800

Interest expense

4,700

Income before taxes

54,750

Income tax expense

22,055

Net income

$

32,695

CABOT CORPORATION

Balance Sheet

December 31

Assets

Liabilities and Equity

Cash

$

18,000

Accounts payable

$

16,500

Short-term investments

8,800

Accrued wages payable

4,400

Accounts receivable, net

32,000

Income taxes payable

4,800

Merchandise inventory

30,150

Long-term note payable, secured by mortgage on plant assets

72,400

Prepaid expenses

2,850

Common stock

84,000

Plant assets, net

154,300

Retained earnings

64,000

Total assets

$

246,100

Total liabilities and equity

$

246,100

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.)

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. $50,900, total assets, $169,400, common stock, $84,000, and retained earnings, $31,305.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 455,600 Cost of goods sold 297, 350 Gross profit 158,250 Operating expenses 98.800 Interest expense 4,700 Income before taxes 54,750 Income tax expense 22,055 Net income $ 32,695 $ Assets Cash Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 18,000 hecounts payable * 8.800 Accrued wages payable 32,000 Income taxes payable 30,150 Long-term note payable, secured by mortgage on plant assets 2.850 Common stock 154,300 Retained earnings $ 246,100 Total liabilities and equity 16,500 4,400 4,800 72,400 Prepaid expenses Plant assets, net Total assets 84,000 64,000 $ 246,100 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. Total assets $ 246,100 Total liabilities and equity $ 246,100 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. Reg 1 and 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 7 Req8 Req9 Reg 10 Req 11 Compute the current ratio and acid-test ratio. + Current Ratio Choose Denominator: Choose Numerator: 1 Current Ratio Current ratio oto 1 Acid-Test Ratio Choose Denominator: Choose Numerator: 1 Acid-Test Ratio Acid-Test Ratio 0 to 1 Req3 > $ 16,500 Short-term investments Accounts receivable, net Merchandise inventory December 31 Liabilities and Equity $ 18.000 Accounts payable 8,800 Negrued wages payable 32,000 Income taxes payable 30,150 Long-ter note payable, secured by mortgage on plant assets 2.850 Common stock 154,300 Retained earnings $ 246, 100 Total liabilities and equity 72,400 Skipped Prepaid expenses Plant assets, net Total assets 84,000 64,000 $ 246,100 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. rences Req 4 Reg 5 Req 1 and 2 Reg 3 Req6 Req? Req8 Reg9 Reg 10 Reg 11 Compute the days' sales uncollected. Days' Sales Uncollected 1 Choose Denominator: x Days - Days Sales Uncollected Choose Numerator: Days sales uncollected 0 days Reg 1 and 2 Reg 4 > Net Income $ 32,695 8.33 points $ 16,500 Skipped Cash Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 18,000 Accounts payable 8,800 Negrued wages payable 32.000 Income taxes payable 30,150 tong-term note payable, secured by mortgage on plant assets 2,850 Common atock 154,300 Retained earnings $ 246,100 Total liabilities and equity 72,400 Prepaid expenses Plant assets, net Total assets 84,000 64,000 $ 246.100 Print 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.) References Complete this question by ebtering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 5 Reg 4 Req 7 Reg 6 Reg 11 Req8 Reg 9 Req 10 Compute the inventory turnover. Inventory Turnover Choose Denominator: Choose Numerator: 1 Inventory Turnover Inventory turnover 0 times Net income 8.33 points $ Skepped 16,500 Short-term investments Accounts receivable, net Merchandise inventory CAROT CORPORATION Balanes Sheet December 31 Liabilities and Equity $ 18,000 Accounts payable 8.800 Accrued wages payable 32.000 Income taxes payable 30,150 Long-ter note payable, secured by mortgage on plant assets 2,850 common stock 154,300 Retained earnings $ 246,100 Total liabilities and equity 4.800 72.400 Prepaid expenses Plant assets, net Total asseta 86,000 64,000 $ 246,100 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.) References Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Rdas Reg 6 Req 7 Req8 Req9 Req 10 Reg 11 Compute the days' sales in inventory. Days' Sales in Inventory Choose Denominator: Choose Numerator: 1 x Days - Days' Sales In Inventory Days' sales in Inventory 0 days Net Income Skopped $ Cash Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 18,000 Accounts payable 8,800 Accrued wages payable 32,000 Income taxes payable 30,150 Long-term note payable, secured by mortgage on plant assets 2,850 Common stock 154,00 Retained earnings $ 246, 100 Total liabilities and equity 16,500 4.400 4,800 72,400 84.000 Prepaid expenses Plant asseta, net Total assets 64,000 $ 246,100 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.) References 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 Req8 Reg 9 Reg 10 Req11 Compute the debt-to-equity ratio. (6) Debt-to-Equity Ratio Choose Denominator: Choose Numerator: = = Debt-to-Equity Ratio Debt-to-equity ratio 0 to 1 Net income 8.33 Skipped $ Cash Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 18,000 Accounts payable 8,800 Accrued wages payable 32,000 Income taxes payable 30,150 Long-term note payable, secured by mortgage on plant assets 2.850 Common stock 154,300 Retained earnings $ 246, 100 Total liabilities and equity 16,500 4,400 4.800 72,400 Prepaid expenses Plant anneta, net Total assets 84,000 64,000 $ 246,100 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.) References Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Reg 5 Reg 6 Req Req8 Req 9 Req 10 Req 11 Compute the times interest earned. Times Interest Earned 1 Choose Denominator: Choose Numerator: = Times Interest Earned = Times Interest earned 0 times Reg 6 Req8 > Net Income 8.33 points Assets $ Skripped 16,500 Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Dalance sheet December 31 Liabilities and Equity $ 18,000 Accounts payable .800 Accrued wages payable 32,000 Income taxes payable 30,150 Long-term note payable, secured by mortgage on plant assets 2.850 Common stock 154,300 Retained earnings $ 246, 100 Total liabilities and equity 4,800 72.400 84,000 Prepaid expenses Plant assets, net Total Assets $ 246,100 Print 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.) References Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 71 Red Reg 9 Reg 10 Req 11 Compute the profit margin ratio. Profit Margin Ratio Choose Denominator: Choose Numerator: = Profit margin ratio Profit margin ratio $ 32,695 8.33 points Skipped 16,500 Cash Short-term investments Accounts receivable, net Merchandise inventory CAROT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 18,000 hecounts payable 8.800 Accrued wages payable 32,000 Income taxes payable 30,150 Long-term note payable, secured by mortgage on plant assets 2,850 Comon stock 154,300 Retained earnings $ 246,100 Total liabilities and equity 4,800 Prepaid expenses Plant asseta, net Total assets 84,000 $ 246, 100 Print 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.) ferences Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Reqs Reg 6 Reg 7 Req8 Reg 9 Reg 101 Rda 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 0 % Req 10