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, $50,900; total assets, $169,400; common stock, $89,000; and retained earnings, $41,651.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 447,600 Cost of goods sold 298,450 Gross profit 149, 150 Operating expenses 99, 300 Interest expense 3,800 Income before taxes 46,050 Income tax expense 18,551 Net income $ 27,499 $ Assets Cash Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 10,000 Accounts payable 8,200 Accrued wages payable 31,200 Income taxes payable 42,150 Long-term note payable, secured by mortgage on plant assets 2,700 Common stock 152,300 Retained earnings $ 246,550 Total liabilities and equity 18,500 3,800 3,700 62,400 Prepaid expenses Plant assets, net Total assets 89,000 69,150 $ 246,550 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.) Current Ratio Choose Numerator: Choose Denominator: Current Ratio Current assets |/ Current liabilities = Current ratio $ 0 X/ $ 0 X = 0 to 1 Acid-Test Ratio Choose Numerator: 7 Choose Denominator: Acid-Test Ratio Quick assets Current liabilities II = Acid-Test Ratio I = 0 to 1 Choose Numerator: Days' Sales Uncollected Choose Denominator: Days = II Days Sales Uncollected / X = II Days sales uncollected / X II 0 days Inventory Turnover Choose Numerator: 1 Choose Denominator: III Inventory Turnover Inventory turnover / = = 0 times Days' Sales in Inventory. Choose Numerator: / Choose Denominator: Days = 11 Days' Sales in Inventory Days' sales in inventory 0 days = II X = = Debt-to-Equity Ratio Choose Numerator: / Choose Denominator: Debt-to-Equity Ratio Debt-to-equity ratio 1 / I 11 = 0 to 1 Times Interest Earned Choose Numerator: Choose Denominator: Times Interest Earned Times interest earned + = + II 0 times Profit Margin Ratio Choose Numerator: 1 Choose Denominator: Profit margin ratio Profit margin ratio 7 = 0 % Total Asset Turnover Choose Numerator: 1 Choose Denominator: = Total Asset Turnover = Total asset turnover = 0 times Return on Total Assets Choose Numerator: Choose Denominator: = Return on Total Assets Return on total assets | = II = = 0 % Return on Common Stockholders' Equity Choose Numerator: Choose Denominator Return On Common Stockholders' Equity Return on common stockholders' equity 1 / = 1 = 0 %
