Question
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $54,900; total
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $54,900; total assets, $219,400; common stock, $82,000; and retained earnings, $52,705.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$449,600Cost of goods sold298,150Gross profit151,450Operating expenses99,400Interest expense4,500Income before taxes47,550Income taxes19,155Net income$28,395
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$20,000Accounts payable$15,500Short-term investments8,800Accrued wages payable3,000Accounts receivable, net29,800Income taxes payable4,100Notes receivable (trade)*4,500Merchandise inventory40,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses2,550Common stock82,000Plant assets, net150,300Retained earnings81,100Total assets$256,100Total liabilities and equity$256,100
* 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.)
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