Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit selected balance sheet amounts at December 31, 2016, were inventory, $53,900; total assets, $199,400; common stock. $90,000; and retained earnings, $23.865.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales $ 453,600 Cost of goods sold 298,450 Gross profit 155, 150 operating expenses 99,300 Interest expense 4,800 Income before taxes 51,050 Income taxes 20.565 Net income $ 30,485 Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade) Merchandise inventory CAROT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity $ 16,000 Accounts payable 8,800 Accrued wages payable 31,000 Income taxes payable 3,500 32,150 Long-term note payable, secured by mortgage on plant assets 3,000 Common stock 147,300 Retained earnings $ 241,750 Total liabilities and equity 19,500 3,600 2,900 71,400 Prepaid expenses Plant assets, net Total assets 90,000 54,350 $ 241,750 These are short-term notes recelvable 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 6 Reg 7 Reg 8 Reg 9 Reg 10 Reg 11 Req 1 and 2 Req3 Reg 4 Reqs Compute the current ratio and acid-test ratio. (1) Current Ratio Choose Numerator: 7 Choose Denominator: / Current Ratio Current ratio 2017: 1 to 1 (2) Acid-Test Ratio Choose Denominator: Choose Numerator: Acid-Test Ratio = Acid-Test Ratio to 1 2017: R1 and Reg 3 > (3) Choose Numerator: Days' Sales Uncollected Choose Denominator: Days 1 Days Sales Uncollected / Days sales uncollected 2017: days (4) Choose Numerator: Inventory Turnover Choose Denominator: 1 Inventory Turnover Inventory turnover / 2017: 1 times Compute the debt-to-equity ratio. (6) Debt-to-Equity Ratio Choose Denominator: Choose Numerator: 1 1 Debt-to-Equity Ratio Debt-to-equity ratio to 1 2017: Compute the times interest earned. (7) Times Interest Earned Choose Numerator: 1 Choose Denominator: Times Interest Earned 1 Times interest earned 2017: 1 11 times Compute the profit margin ratio. (8) Profit Margin Ratio 1 Choose Denominator: Choose Numerator: Profit margin ratio Profit margin ratio 2017: % Compute the return on total assets. (10) Return on Total Assets Choose Numerator: 1 Choose Denominator: Return on Total Assets Return on total assets 2017: Reg 9 Reg 11 > Compute the return on common stockholders' equity, (11) Choose Numerator: Retum on Common Stockholders' Equity Choose Denominator = Return On Common Stockholders' Equity Return on common stockholders' equity % 2017: (Reg 10
