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, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings, $22,748.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales $ 448,600 Cost of goods sold 297,250 Gross profit 151, 350 Operating expenses 98,600 Interest expense 4,100 Income before taxes 48,650 Income taxes 19,598 Net income $ 29,052 Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade)* Merchandise inventory CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity $ 10,000 Accounts payable 8,400 Accrued wages payable Income taxes payable 4,500 32,150 Long-term note payable, secured by mortgage on plant assets 2,650 Common stock 153,300 Retained earnings $ 240,200 Total liabilities and equity $ 17,500 3,200 3,300 63,400 Prepaid expenses Plant assets, net Total assets 90,000 62,800 $ 240,200 * 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.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req 4 Req5 Rego Req7 Req 8 Req8 Req 9 Req 10 Req 11 Compute the current ratio and acid-test ratio. Choose Numerator: Current assets 2017: Current Ratio 1 Choose Denominator: = 1 Current liabilities | = $ 24000 = Current Ratio Current Ratio to 1 (2) Acid-Test Ratio Choose Denominator: Choose Numerator: = Acid-Test Ratio Acid-Test Ratio 0 to 1 2017: = - Red 1 and 2 Req3 > 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 Req 4 Reg 5 Reg 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the days' sales uncollected. (3) Days' Sales Uncollected Choose Denominator: X Days Choose Numerator: - Days Sales Uncollected = Days Sales Uncollected 2017: x = days 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 Req31 Req 4 Reg 5 Req 6 Re Req 7 Req 8 Req9 Req 10 Req 11 Compute the inventory turnover. Inventory Turnover Choose Denominator: Choose Numerator: = Inventory Turnover Inventory Turnover 0 times 2017: 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 Req 4 Reg 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the days' sales in inventory. (5) Days' Sales in Inventory 1 Choose Denominator: X Days Choose Numerator: - = Days' Sales in Inventory Days' Sales in Inventory 0 days 2017: 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 Reg 3 Req 4 Req 5 Reg 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the debt-to-equity ratio. Debt-to-Equity Ratio I Choose Denominator: Choose Numerator: = = = Debt-to-Equity Ratio Debt-to-Equity Ratio 0 to 1 2017:| 1 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 Req 4 Req 5 Reg 6 | Rea> | Rega Req 7 Req 8 Req 9 Rega Req 10 Req 10 Req 11 Reg 11 Compute the times interest earned. (7) Times Interest Earned Choose Numerator: Times Interest Earned Choose Denominator: = iD- Times interest earned 2017: + 0 times 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 Req 4 Reg 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the profit margin ratio. (8) Profit Margin Ratio Choose Denominator: Choose Numerator: I = Profit margin ratio Profit margin ratio 2017: i = 0 % ( Req 7 Req9 > 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 Req 4 Reg 5 Reg 6 Req7 Req8 | Regg | Req 10 Req 9 Req 10 Req 11 Req 11 Compute the total asset turnover. (9) Total Asset Turnover Choose Denominator: Choose Numerator: = Total Asset Turnover Total Asset Turnover 0 times 2017: Req8 Req 10 > 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 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the return on total assets. (10) Return on Total Assets I Choose Denominator: Choose Numerator: = Return on Total Assets Return on Total Assets 2017: 0 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 Req 4 Reg 5 Req 6 Req 7 Req 8 Req 9 Req 10 Reg 11 Compute the return on common stockholders' equity. (11) Choose Numerator: Return on Common Stockholders' Equity Choose Denominator = Return On Common Stockholders' Equity = Return On Common Stockholders' Equity 2017 0 % ( Req 10 Reg 11