Question
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2015, were inventory, $55,900; total
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2015, were inventory, $55,900; total assets, $249,400; common stock, $85,000; and retained earnings, $48,092.)
CABOT CORPORATION Income Statement For Year Ended December 31, 2016 | ||
Sales | $ | 453,600 |
Cost of goods sold | 297,550 | |
Gross profit | 156,050 | |
Operating expenses | 98,800 | |
Interest expense | 3,900 | |
Income before taxes | 53,350 | |
Income taxes | 21,492 | |
Net income | $ | 31,858 |
CABOT CORPORATION Balance Sheet December 31, 2016 | ||||||
Assets | Liabilities and Equity | |||||
Cash | $ | 18,000 | Accounts payable | $ | 19,500 | |
Short-term investments | 9,400 | Accrued wages payable | 3,800 | |||
Accounts receivable, net | 33,600 | Income taxes payable | 3,300 | |||
Notes receivable (trade)* | 6,000 | Long-term note payable, secured | ||||
Merchandise inventory | 36,150 | by mortgage on plant assets | 66,400 | |||
Prepaid expenses | 2,500 | Common stock | 85,000 | |||
Plant assets, net | 152,300 | Retained earnings | 79,950 | |||
Total assets | $ | 257,950 | Total liabilities and equity | $ | 257,950 | |
* 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.)
* These are short-term notes receivable arising from customer (trade) sales.
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