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, $49,900; total assets, $179,400; common stock, $85,000; and retained earnings, $40,451.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION Income Statement CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity $ 18,000 Accounts payable 9,000 Accrued wages payable 32,200 Income taxes payable 34,150 Long-term note payable, secured by mortgage on plant assets 3,150 152,300 Common stock Retained earnings $ 248,800 Total liabilities and equity For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income $ 450,600 297,850 152,750 98,900 4,200 49,650 20,001 $ 29,649 $ 16,500 3,400 3,400 70,400 85,000 70,100 $ 248,800 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 equity. 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) Numerator: (2) Numerator: 1 1 Current Ratio Denominator: Acid-Test Ratio Denominator: = = || = Current Ratio Current ratio to 1 = Acid-Test Ratio = Acid-Test Ratio Req 1 and 2 Req 3 > to 1 Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the days' sales uncollected. (3) Days' Sales Uncollected Numerator: Denominator: Days Days Sales Uncollected 1 < Req 1 and 2 Req 4 > = Days sales uncollected days Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the inventory turnover. (4) Numerator: 1 Inventory Turnover Denominator: = II = II = < Req 3 Req 5 Inventory Turnover Inventory turnover times > Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the days' sales in inventory. (5) Numerator: I Days' Sales in Inventory. Denominator: < Req 4 Days = Days' Sales in Inventory = Days' sales in inventory II = Req 6 > days Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the debt-to-equity ratio. (6) Numerator: 1 1 Debt-to-Equity Ratio Denominator: = Debt-to-Equity Ratio = Debt-to-equity ratio = Req 5 Req 7 > to 1 Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the times interest earned. (7) Numerator: + + Times Interest Earned Denominator: < Req 6 Req 8 > 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 Req 10 Req 11 Compute the profit margin ratio. (8) Profit Margin Ratio Numerator: 1 Denominator: = Profit margin ratio = Profit margin ratio = < Req 7 Req 9 > % Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the total asset turnover. (9) Numerator: 1 1 Total Asset Turnover Denominator: Total Asset Turnover = Total asset turnover = times < Req 8 Req 10 > 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) Numerator: 1 I Return on Total Assets Denominator: = Return on Total Assets = Return on total assets = % < Req 9 Req 11 > 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 equity. (11) Numerator: 1 Return on Equity Denominator II = > Req 10 II = II = Req 11 Return On Equity Return on equity %