Problem 17-4A Calculating financial statement ratios LO P3 25 points 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. $51.900; total assets, $209,400; common stock, $83,000, and retained earnings, $27.211.) Book Print CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 451,600 Cost of goods sold 298,350 Gross profit 153,25 Operating expenses 99,500 Interest expense 4,200 Income before taxes 49,550 Income tax expense 19,961 Net income $ 29,589 References 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 $ 12,000 Accounts payable 9,400 Accrued wages payable 33,400 Income taxes payable 32,150 Long-term note payable, secured by mortgage on plant assets 2,850 Common stock 149,380 Retained earnings $ 239, 100 Total liabilities and equity $ 19,500 4,400 4,000 71,400 83,000 56,800 $ 239, 100 Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected. (4) inventory turns (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover (10) retur 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 Reg 4 Reg 5 Reg 6 Reg 7 Req 8 Reg 9 Reg 10 Compute the current ratio and acid-test ratio. (1) Choose Numerator: (Current assets Current Ratio 1 Choose Denominator: Current liabilities Current Ratio Current ratio 1 O to 1 (2) Choose Numerator: Quick assets Acid Test Ratio Choose Denominator Current liabilities Acid-Test Ratio Acid-Test Ratio oto 1 1 Rasa Reg 3 > -quired: ompute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory debt-to-equity ratio (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10 common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Reg 3 Reg 1 and 2 Reg 4 Reg 5 Reg 6 Req 7 Req 8 Reg 9 Compute the inventory turnover. (4) Choose Numerator: 1 Inventory Turnover Choose Denominator: Average inventory Cost of goods sold Inventory Turnover Inventory turnover O times / Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 Reg 6 Req 7 Reg 8 Req 9 Req 10 Reg 11 ces Compute the times interest earned. (7) Times Interest Earned Choose Numerator: 1 Choose Denominator: Times Interest Esmed Income before tax Interest expense 1 Interest expense Times interest earned 1 O times Total assets $ 239, 100 Total liabilities and equity $ 239, Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) 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 Reg 5 Reg 6 Req 7 Reg Reg 9 F Compute the profit margin ratio. (8) Profit Margin Ratio 1 Choose Denominator: 1 Net sales Choose Numerator: Net income 11 Profit margin ratio = Profit margin ratio 0 % = $ 239, Total assets $ 239, 100 Total liabilities and equity Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio (9) total asset turnover, (10) 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 Reg 5 Req 6 Req 7 Req 8 Regle Compute the total asset turnover. (9) II Choose Numerator: Net sales Total Asset Turnover 1 Choose Denominator: Average total liabilities / 11 Total Asset Turnover Total asset turnover O times = quired: empute the following: (1) current ratio. (2) acid-test ratio, (3) days' sales uncollected, (4) inventory t debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req3 Req 1 and 2 Req 4 Reg 5 Req 6 Req 7 Req 8 Reg 9 Compute the return on total assets. (10) II Return on Total Assets Choose Numerator: Net income Return on Total Assets I Choose Denominator: 1 Average total assets / Il Return on total assets = 0 % Req 1 and 2 Rea 3 Reg 4 Reg 5 Reg 6 Reg 7 Reg B Reg 9 Reg 10 Reg 11 Compute the return on common stockholders' equity. (11) Return on Common Stockholders' Equity Choose Denominator Average common stockholders equity Choose Numerator: Preferred dividends Net income - Return On Common Stockholders' Equity - Return on common stockholders' equity 0 %