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, $47,900, total assets, $219,400; common stock, $80,000; and retained earnings. $37,465.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 455,600 Cost of goods sold 296,850 Gross profit 158,750 Operating expenses 99,400 Interest expense 4,700 Income before taxe 54,650 Income tax expense 22,015 Net Income $ 32,635 Assets Canh Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 16,000 Accounts payablo 8.800 Accrued wages payablo 30,000 Income taxes payable 32,150 Long-term note payable, secured by mortgage on plant assets 2,750 Common stock 150,300 Retained earninga $ 240,000 Total 1labilities and equity $ 18,500 3,200 2,800 65,400 Prepaid expenses Plant assets, net Total assets 80,000 70, 100 240,000 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.) Mc Graw Hill Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req4 Reg 5 Reg 6 Req 7 Req 8 Reg 9 Compute the inventory turnover. (4) Choose Numerator: Inventory Turnover 1 Choose Denominator: 11 Inventory Turnover Inventory turnover times 7 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 Req 8 Req9 Reg 10 Reg 11 Compute the days' sales in Inventory (5) Choose Numerator: Days Sales In Inventory Choose Denominator 1 Days = Days' Sales In Inventory Days' sales in Inventory days Req6 > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 Reg 6 Req7 Req8 Req 9 Reg 10 Reg 11 Compute the times interest earned. (7) Times Interest Earned Choose Denominator: Choose Numerator: 11 Times Interest Earned Times interest earned times ( Req6 Req8 > k Complete this question by entering your answers in the tabs below. TE + Req 1 and 2 Reg 3 Reg Req 4 Req 5 Req 6 Reg 7 Req8 Reg 9 Compute the profit margin ratio. inces (8) Choose Numerator: Profit Margin Ratio Choose Denominator: 1 Profit margin ratio = Profit margin ratio 1 1 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 Req 9 TILLS Compute the total asset turnover. (9) Total Asset Turnover Choose Denominator: Choose Numerator: 11 Total Asset Turnover Total asset turnover times Complete this question by entering your answers in the tabs below. Reg 3 Req 1 and 2 ALL LOLLA Reg 5 Reg 4 Reg 6 Req 7 Req9 Req 10 Req 8 Compute the return on total assets. (10) Return on Total Assets Choose Denominator: Choose Numerator: 1 Return on Total Assets 1100 / Return on total assets % Complete this question by Reg 9 Reg 1 and 2 Reg 3 Reg 10 Reg 11 Reg 4 Reg 6 Reg 7 Reg 8 Reg 5 Compute the return on common stockholders' equity. Return on Common Stockholders' Equity Choose Denominator Choose Numerator: Return On Common Stockholders' Equity = Return on common stockholders' equity % = Ren 11
