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, $53,900; total assets, $229,400; common stock, $82,000; and retained earnings, $39,987.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $453,600 Cost of goods sold 298, 350 Gross profit 155, 250 Operating 99, 100 expenses Interest expense 4,300 Income before 51,850 taxes Income tax 20,887 expense Net income $ 30,963 $ 16,500 3,600 Assets Cash Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 10,000 Accounts payable 8,000 Accrued wages payable 31,600 Income taxes payable 36,150 Long-term note payable, secured by mortgage on plant assets 3,000 Common stock 152,300 Retained earnings $241,050 Total liabilities and equity 3,600 64,400 Prepaid expenses Plant assets, net Total assets 82,000 70,950 $241,050 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 Reg 4 Reg 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the current ratio and acid-test ratio. (1) Current Ratio Choose Denominator: Choose Numerator: 1 Current Ratio / 1 Current ratio to 1 (2) Acid-Test Ratio Choose Denominator: Choose Numerator: 1 Acid-Test Ratio = Acid-Test Ratio to 1 1 Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Reg 5 Reg 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the days' sales uncollected. (3) Days' Sales Uncollected Choose Numerator: 1 Choose Denominator: Days Days Sales Uncollected / = Days sales uncollected / days Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the days' sales in inventory. (5) Days' Sales in Inventory Choose Numerator: / Choose Denominator: Days Days' Sales in Inventory Days' sales in inventory / 1 X days Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Reg 5 Req 6 Req 7 Req 8 Reg 9 Req 10 Req 11 Compute the times interest earned. (7) Times Interest Earned Choose Numerator: 1 Choose Denominator: Times Interest Earned + 1 Times interest earned + / times Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Reg 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the total asset turnover. (9) Total Asset Turnover Choose Numerator: / Choose Denominator: Total Asset Turnover / = Total asset turnover / times Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Reg 6 Req 7 Req 8 Reg 9 Req 10 Req 11 Compute the return on total assets. (10) Return on Total Assets Choose Numerator: 1 Choose Denominator: Return on Total Assets 1 Return on total assets 1 = % Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Reg 5 Req 6 Req 7 Req 8 Reg 9 Req 10 Req 11 Compute the return on common stockholders' equity. (11) Return on Common Stockholders' Equity Choose Numerator: 1 Choose Denominator Return On Common Stockholders' Equity Return on common stockholders' equity / / %
