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, $54,900; total assets, $209,400; common stock, $86,000; and retained earnings, $39,495.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold $ 449,600 297,650 Gross profit 151,950 Operating expenses 99,400 Interest expense 4,900 Income before taxes 47,650 Income tax expense 19,195 Net income 28,455 Assets CABOT CORPORATION Balance Sheet December 31 12,000 Liabilities and Equity Cash Accounts payable 18,500 Short-term investments 8,800 Accrued wages payable 4,200 Accounts receivable, net 33,800 Income taxes payable 3,600 Merchandise inventory 38,150 Long-term note payable, secured by 63,400 mortgage on plant assets Prepaid expenses 2,600 Common stock 86,000 Plant assets, net 148,300 Retained earnings 67,950 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 current ratio and acid-test ratio. (1) Choose Numerator: Current Ratio Choose Denominator: = Current Ratio = Current ratio = to 1 (2) Acid-Test Ratio Choose Numerator: Choose Denominator: = Acid-Test Ratio < Prev 24 of 24 Next Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req & Req 9 Req 1 Compute the days' sales uncollected. (3) Days' Sales Uncollected Choose Numerator: Choose Denominator: X Days X I = = X = < Req 1 and 2 Days Sales Uncollected Days sales uncollected days Req 4 > 1 Req 1 and 2 Req 3 eq 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Rec Compute the inventory turnover. (4) Choose Numerator: Inventory Turnover 1 Choose Denominator: 1 = Inventory Turnover Inventory turnover times < Req 3 Req 5 > Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req Compute the days' sales in inventory. (5) Choose Numerator: Days' Sales in Inventory Choose Denominator: X Days = Days' Sales in Inventory X = X Days' sales in inventory days i < Req 4 Req 6 (6) Debt-to-Equity Ratio Choose Numerator: 1 Choose Denominator: = Debt-to-Equity Ratio Debt-to-equity ratio to 1 < Req 5 Req 7 >> Req 1 and 2 Req 3 Req 4 Req 5 Req 6 R7 Req 8 Req 9 Req 10 Req 11 Compute the times interest earned. (7) Times Interest Earned Choose Numerator: Choose Denominator: = Times Interest Earned = Times interest earned + times + Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Compute the profit margin ratio. (8) Choose Numerator: Profit Margin Ratio Choose Denominator: II === == Profit margin ratio Profit margin ratio < Req 7 Req 9 > % Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Reg 8 Req 9 Req 10 Req 11 Compute the total asset turnover. (9) Choose Numerator: Total Asset Turnover Choose Denominator: T Total Asset Turnover = Total asset turnover = < Req 8 Req 10 > times Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 R Compute the return on total assets. (10) Choose Numerator: Return on Total Assets T Choose Denominator: 90 % Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 : return on common stockholders' equity. Return on Common Stockholders' Equity Choose Numerator: Choose Denominator = < Req 10 Req 11 == Return On Common Stockholders' Equity Return on common stockholders' equity