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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

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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, $179,400; common stock, $88,000; and retained earnings, $46,776.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 449,600 Cost of goods sold 298,550 Gross profit 151,050 Operating expenses 99,300 Interest expense 3,900 Income before taxes 47,850 Income tax expense 19,276 Net income $ 28,574 $ Assets Cash Short-term investments Accounts receivable, net Merchandise inventory CABOT CORPORATION Balance Sheet December 31 Liabilities and Equity $ 18,000 Accounts payable 8,400 Accrued wages payable 33,800 Income taxes payable 38,150 Long-term note payable, secured by mortgage on plant assets 3,100 Common stock 148,300 Retained earnings $ 249,750 Total liabilities and equity 16,500 3,200 3,300 63,400 Prepaid expenses Plant assets, net 88,000 75,350 $ 249,750 Total assets 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.) 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) Current Ratio Choose Numerator: Choose Denominator: Current Ratio = = Current ratio - 11 to 1 (2) Acid-Test Ratio Choose Numerator: Choose Denominator: II Acid-Test Ratio 11 Acid-Test Ratio = to 1 Req 1 and 2 Reg 3 Reg 4 Req 5 Reg 6 Req 7 Req 8 Req 9 Req 10 Reg 11 Compute the inventory turnover. (4) Inventory Turnover Choose Numerator: Choose Denominator: Inventory Turnover Inventory turnover = times Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Reg 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 + II times Req 6 Req8 > Req 1 and 2 Req3 Reg 4 Req 5 Req 6 Reg 7 Req 8 Req 9 Req 10 Req 11 Compute the profit margin ratio. (8) Profit Margin Ratio Choose Denominator: Choose Numerator: = Profit margin ratio Profit margin ratio 1 / = % Req 1 and 2 Reg 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the total asset turnover. (9) Total Asset Turnover Choose Denominator: Choose Numerator: Total Asset Turnover 7 = Total asset turnover 1 = times Req 1 and 2 Reg 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Reg 11 Compute the return on total assets. (10) Return on Total Assets Choose Numerator: Choose Denominator: Return on Total Assets / = Return on total assets = %

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