Question
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
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, $48,900; total assets, $189,400; common stock, $81,000; and retained earnings, $38,990.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 453,600 Cost of goods sold 297,750 Gross profit 155,850 Operating expenses 99,200 Interest expense 3,800 Income before taxes 52,850 Income tax expense 21,290 Net income $ 31,560 CABOT CORPORATION Balance Sheet December 31 Assets Liabilities and Equity Cash $ 18,000 Accounts payable $ 18,500 Short-term investments 8,800 Accrued wages payable 4,000 Accounts receivable, net 33,600 Income taxes payable 3,200 Merchandise inventory 34,150 Long-term note payable, secured by mortgage on plant assets 67,400 Prepaid expenses 2,800 Common stock 81,000 Plant assets, net 147,300 Retained earnings 70,550 Total assets $ 244,650 Total liabilities and equity $ 244,650 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.) Compute the days' sales uncollected. Compute the inventory turnover. Compute the days' sales in inventory. Compute the debt-to-equity ratio. Compute the times interest earned. Compute the profit margin ratio. Compute the total asset turnover. Compute the return on total assets. Compute the return on common stockholders' equity.
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