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, $52,900; total assets, $209,400; common stock, $80,000; and retained earnings, $44,698.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income taxes $448,600 297,350 151,250 98,600 4,000 48,650 19,598 $ 29,052 Net income CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade) Merchandise inventory $10,000 Accounts payable $ 16,500 4,800 3,100 8,600 Accrued wages payable 29,600 Income taxes payable 7,000 34,150 Long-term note payable, secured by 67,400 mortgage on plant assets Prepaid expenses Plant assets, net Total assets 2,900 Common stock 153,300 Retained earnings 80,000 73,750 $ 245,550 $245,55 Total liabilities and equity * 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.) Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9Req 10 Req 11 Compute the current ratio and acid-test ratio. Choose Numerator: Choose Denominator:Current Ratio - Current rati 2017: to 1 Acid-Test Ratio Choose Numerator: / Choose Denominator: Acid-Test Ratio Acid-Test Ratio 2017: to 1 Req 1 and 2Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10Req 11 Compute the days' sales uncollected. Days' Sales Uncollected Choose Numerator: 1 Choose Denominator: x Days Days Sales Uncollected - Days sales uncollected 2017: days Req 1 and 2 Req 4 Req 1 and 2 Req 3 Req 4 Req 5Req 6Req 7 Req 8 Req 9 Req 10 Req 11 Compute the inventory turnover Numerator: Choose Denomi nator:Inventory Turnover - Inventory turnover 2017: times K Req 3 Req5 > Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10Req 11 Compute the days' sales in inventory. Days' Sales in Inventory Choose Numerator: Choose Denominator:X DaysDays' Sales in Inventory Days' sales in inventory 2017: days Req 4 Req 6 Req 1 and 2 Req 3 Req 4 Req 5 Req6Req7Req 8 Req 9Req 10 Req 11 Compute the debt-to-equity ratio. Choose Numerator: Choose Denominator:Debt-to-Equity Ratio Debt-to-equity ratio 2017: to 1 Req 5 Req 7 Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9Req 10 Req 11 Compute the times interest earned. Choose Numerator: Choose Denominator: Times Interest Earned = - Times interest earned 2017: times Req 6 Req 8 > Req 1 and 2 Req3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9Req 10 Req 11 Compute the profit margin ratio. Profit Margin Ratio Choose Numerator: Choose Denominator: Profit margin ratio Profit margin ratio 2017: Req 7 Req 9 Req 1 and 2Req 3Req 4Req 5Rq 6Rq 7 Rq Req 9Rq 10 Req 11 Compute the total asset turnover. Total Asset Turnover Choose Numerator: | 1 Choose Denominator: Total Asset Turnover - Total asset turnover times Req 10 2017: Req 8 Req 4 Req 5 Req 6 Req 8 Req 1 and 2 Req 3 Compute the return on total assets. (10) Req 7 Req 9 Req 10Req 11 Return on Total Assets Choose Numerator: Choose Denominator: Return on Total Assets Return on total assets 2017: Req 9 Req 11> Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8Req 9 Req 10Req 11 Compute the return on common stockholders' equity Choose Numerator: Choose Denominator Return On Common Stockholders Equity Return on common stockholders' equity 2017: Req 10 Req 11