Question
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
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, $259,400; common stock, $87,000; and retained earnings, $38,213.)
CABOT CORPORATION | |||
Balance Sheet | |||
December 31 of current year | |||
Assets | Liabilities and Equity | ||
Cash | $ 16,000 | Accounts payable | $ 18,500 |
Short-term investments | 8,400 | Accrued wages payable | 4,400 |
Accounts receivable, net | 33,200 | Income taxes payable | 4,600 |
Merchandise inventory | 40,150 | Long-term note payable, secured by mortgage on plant assets | 71,400 |
Prepaid expenses | 3,100 | Common stock | 87,000 |
Plant assets, net | 151,300 | Retained earnings | 66,250 |
Total assets | $ 252,150 | Total liabilities and equity | $ 252,150 |
CABOT CORPORATION | |
---|---|
Income Statement | |
For Current Year Ended December 31 | |
Sales | $ 448,600 |
Cost of goods sold | 297,850 |
Gross profit | 150,750 |
Operating expenses | 99,500 |
Interest expense | 4,300 |
Income before taxes | 46,950 |
Income tax expense | 18,913 |
Net income | $ 28,037 |
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.
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