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, $199,400; common stock, $89,000; and retained earnings, $29,269.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales $ 453,600 Cost of goods sold 297,250 Gross profit 156, 350 Operating expenses 99,100 Interest expense 4,700 Income before taxes 52,550 Income taxes 21,169 Net income $ 31,381 $ Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade) * Merchandise inventory CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity $ 12,000 Accounts payable 9,600 Accrued wages payable 29,400 Income taxes payable 6,500 32,150 Long-term note payable, secured by mortgage on plant assets 3,100 Common stock 148,300 Retained earnings $ 241,050 Total liabilities and equity 18,500 3,000 4,500 65,400 Prepaid expenses Plant assets, net Total assets 89,000 60,650 $ 241,050 * 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.) Compute the current ratio and acid-test ratio. (1) Choose Numerator: Current Ratio Choose Denominator: = | = = Current Ratio Current ratio 0 to 1 2017: I (2) Choose Numerator: Acid-Test Ratio Choose Denominator: = Acid-Test Ratio = Acid-Test Ratio 2017: 0 to 1 Compute the days' sales uncollected. (3) Days' Sales Uncollected Choose Denominator: x Days Choose Numerator: = Days Sales Uncollected = Days sales uncollected 2017: = 0 days Compute the inventory turnover. (4) Inventory Turnover Choose Denominator: Choose Numerator: I = Inventory Turnover Inventory turnover times 2017: I = Compute the days' sales in inventory. (5) Days' Sales in Inventory. Choose Denominator: X Days Choose Numerator: = Days' Sales in Inventory Days' sales in inventory 0 days 2017: II x = Compute the debt-to-equity ratio. (6) Debt-to-Equity Ratio Choose Denominator: Choose Numerator: = Debt-to-Equity Ratio Debt-to-equity ratio oto 1 2017: Compute the times interest earned. (7) Times Interest Earned Choose Numerator: Choose Denominator: Times Interest Earned = = Times interest earned 2017: 0 times Compute the profit margin ratio. (8) Profit Margin Ratio I Choose Denominator: Choose Numerator: = = = Profit margin ratio Profit margin ratio 2017: I = Compute the total asset turnover. (9) Total Asset Turnover I Choose Denominator: Choose Numerator: = = Total Asset Turnover Total asset turnover 0 times 2017: Compute the return on total assets. (10) Choose Numerator: Return on Total Assets I Choose Denominator: = = Return on Total Assets Return on total assets 0 % 2017: Compute the return on common stockholders' equity. (11) Choose Numerator: Return on Common Stockholders' Equity. Choose Denominator = Return On Common Stockholders' Equity Return on common stockholders' equity 2017: 0 %
