+ Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $51,900; total assets, $189,400; common stock, $89,000; and retained earnings, $43,629.) 20 points Skipped CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales $ 450,600 Cost of goods sold 298,150 Gross profit 152,450 Operating expenses 99,300 Interest expense 4,300 Income before taxes 48,850 Income taxes 19,679 Net income $ 29,171 eBook Print References $ Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade) Merchandise inventory CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity $ 20,000 Accounts payable 8,400 Accrued wages payable 29,600 Income taxes payable 4,eee 34,150 Long-term note payable, secured by mortgage on plant assets 2,450 Common stock 152,300 Retained earnings $ 250,900 Total liabilities and equity 18,500 3,80 4,280 63,400 Prepaid expenses Plant assets, net Total assets 89,080 72, see $ 250,900 These are short-term notes receivable arising from customer (trade) sales. 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. Reg 1 and 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 7 Reg 8 Reg 9 Reg 10 Reg 11 Compute the current ratio and acid-test ratio. (1) Current Ratio Choose Numerator: 1 Choose Denominator: = Current Ratio = Current ratio 0 to 1 2017: 1 = (2) Acid-Test Ratio Choose Denominator: Choose Numerator: Acid-Test Ratio = Acid-Test Ratio 0 to 1 2017: = TT Search Q 5 ! Part 1 of 2 Required Information [The following information applies to the questions displayed below.] Summary Information from the financial statements of two companies competing in the same Industry follows. 10 points Skipped Barco Kyan Company Company Data from the current year-end balance sheets Assets Cash $ 20,000 $ 38,eee Accounts receivable, net 34,400 58,400 Current notes receivable (trade) 9,000 7,480 Merchandise inventory 84,34 132,500 Prepaid expenses 5,900 7,480 Plant assets, net 330,000 305,400 Total assets $483,640 $549,100 Barco Kyan Company Company Data from the current year's income statement Sales $ 800,000 $913, 200 Cost of goods sold 594, 180 638) see Interest expense 8,400 14, eee Income tax expense 15,377 25211 Net income 182,123 235,489 Basic earnings per share 4.1 Cash dividends per share 3.72 3.97 eBook 5.36 Print Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings Total liabilities and equity References Beginning-of-year balance sheet data Accounts receivable, net Current notes receivable (trade) Merchandise inventory Total assets Common stock, $5 par value Retained earnings $ 61,340 $ 93,300 82,800 103,880 170,000 196, eee 169,500 156,820 $ 483,640 $549,100 $ 27,800 $ 51 200 57,600 117|400 398,000 382,500 170,00 196eee 113,857 76,935 Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, ( accounts (Including notes) receivable turnover, (d) Inventory turnover, (e) days' sales In Inventory, and (1 days' sales uncollected. (Do not round Intermediate calculations.) 1b. Identify the company you consider to be better short-term credit risk. Complete this question by entering your answers in the tabs below. 1A Current Ratio 1A Acid Test Ratio 1A Acct Rec Turn 1A Invent Turnover 1A Days Sal in Inv 1A Days Sal Uncol Regie For both companies compute the current ratio. Current Ratio (a) Company Choose Numerator: 1 Choose Denominator: = Current Ratio = Current ratio 0 to 1 0 to 1 1 Barco Kyan 1 > O Search O 6 ! Part 2 of 2 Required Information [The following information applies to the questions displayed below.] Summary Information from the financial statements of two companies competing in the same Industry follows. 10 points Barco Company Skipped eBook Barco Kyan Kyan Company Company Company Data from the current year-end balance sheets Data from the current year's income statement Assets sales $ 800,000 $913,200 Cash $ 20,000 $ 38,eee Cost of goods sold 594, 100 638] see Accounts receivable, net 34,400 58,480 Interest expense 8,400 14,000 Current notes receivable (trade) 9,000 7,480 Income tax expense 15,377 25211 Merchandise inventory 84,340 132,500 Net income 182,123 235,489 Prepaid expenses 5,900 7,40 Basic earnings per share 5.36 4.01 Plant assets, net 330,000 305,400 Cash dividends per share 3.72 3.97 Total assets $483,640 $549,120 Beginning-of-year balance sheet data Liabilities and Equity Accounts receivable, net $ 27,800 $ 51/200 Current liabilities $ 61,340 $ 93,380 Current notes receivable (trade) Long-term notes payable 82,800 103,eee Merchandise inventory 57,600 117] 480 Common stock, $5 par value 170,000 196, eee Total assets 398,000 382,5ee Retained earnings 169,500 156,800 Common stock, $5 par value 170,000 196eee Total liabilities and equity $ 483,640 $549,100 Retained earnings 113,857 76,935 Print References 2a. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (C) return on total assets, and (d) return on common stockholders' equity. Assuming that share and each company's stock can be purchased at $85 per share, compute their (e) price- earnings ratios and ( dividend yields. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) 2b. Identify which company's stock you would recommend as the better Investment. Complete this question by entering your answers in the tabs below. 2A Pro Marg Ratio 2A Tot Asset 2A Ret on Tot Turn Assets 2A Ret On Com Stock Equity 2A Price Earn Ratio 2A Div Yield Reg ze For both companies compute the profit margin ratio. (a) CompanyChoose Numerator: Profit Margin Ratio 1 Choose Denominator: / / 1 = Profit margin ratio = Profit margin ratio = % % | Barco Kyan / (2A Pro Marg Ratio 2A Tot Asset Turn > > O Search