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, $47,900; 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, $47,900; total assets, $169,400; common stock, $87,000; and retained earnings, $38,537.)
CABOT CORPORATION Income Statement For Year Ended December 31, 2016 | ||
Sales | $ | 452,600 |
Cost of goods sold | 297,650 | |
Gross profit | 154,950 | |
Operating expenses | 98,900 | |
Interest expense | 4,200 | |
Income before taxes | 51,850 | |
Income taxes | 20,887 | |
Net income | $ | 30,963 |
CABOT CORPORATION Balance Sheet December 31, 2016 | ||||||
Assets | Liabilities and Equity | |||||
Cash | $ | 10,000 | Accounts payable | $ | 17,500 | |
Short-term investments | 8,600 | Accrued wages payable | 4,200 | |||
Accounts receivable, net | 33,600 | Income taxes payable | 4,300 | |||
Notes receivable (trade)* | 5,500 | Long-term note payable, secured | ||||
Merchandise inventory | 32,150 | by mortgage on plant assets | 63,400 | |||
Prepaid expenses | 2,750 | Common stock | 87,000 | |||
Plant assets, net | 153,300 | Retained earnings | 69,500 | |||
Total assets | $ | 245,900 | Total liabilities and equity | $ | 245,900 | |
* 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.)
(1) Current Ratio Choose Denominator: Choose Numerator: 1 Current Ratio Current ratio to 1 2016: (2) Choose Numerator: Acid-Test Ratio 1 Choose Denominator: 1 11 Acid-Test Ratio Acid-test ratio to 1 2016: 11 (3) Days Sales Uncollected Choose Denominator: Days Choose Numerator: 11 Days Sales Uncollected Days sales uncollected days 2016: X 11 (4) Inventory Turnover Choose Denominator: Choose Numerator: Inventory Turnover Inventory turnover times 2016: (5) Days' Sales in Inventory. | Choose Denominator: Choose Numerator: Days x Days' Sales in Inventory Days' sales in inventory days 2016: x 11 (6) Choose Numerator: Debt-to-Equity Ratio 1 Choose Denominator: 1 Debt-to-Equity Ratio Debt-to-equity ratio to 1 2016: (7) Times Interest Earned Choose Numerator: Choose Denominator: Times Interest Earned 11 Times interest earned 2016: / times (8) Profit Margin Ratio 1 Choose Denominator: Choose Numerator: Profit margin ratio Profit margin ratio 11 2016: nd (9) Total Asset Turnover 1 Choose Denominator: Choose Numerator: Total Asset Turnover = Total asset turnover times 2016: (10) Return on Total Assets | Choose Denominator: Choose Numerator: Return on Total Assets Return on total assets 2016: % (11) Choose Numerator: Return on Common Stockholders' Equity. Choose Denominator = Return On Common Stockholders' Equity = Return on common stockholders' equity 2016: %
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