Question
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2014, 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, 2014, were inventory, $47,900; total assets, $199,400; common stock, $81,000; and retained earnings, $32,837.) |
CABOT CORPORATION Income Statement For Year Ended December 31, 2015 | ||
Sales | $ | 453,600 |
Cost of goods sold | 297,950 | |
Gross profit | 155,650 | |
Operating expenses | 99,500 | |
Interest expense | 4,300 | |
Income before taxes | 51,850 | |
Income taxes | 20,887 | |
Net income | $ | 30,963 |
CABOT CORPORATION Balance Sheet December 31, 2015 | ||||||
Assets | Liabilities and Equity | |||||
Cash | $ | 12,000 | Accounts payable | $ | 19,500 | |
Short-term investments | 9,000 | Accrued wages payable | 4,800 | |||
Accounts receivable, net | 32,800 | Income taxes payable | 3,800 | |||
Notes receivable (trade)* | 4,000 | Long-term note payable, secured | ||||
Merchandise inventory | 32,150 | by mortgage on plant assets | 69,400 | |||
Prepaid expenses | 3,050 | Common stock | 81,000 | |||
Plant assets, net | 149,300 | Retained earnings | 63,800 | |||
Total assets | $ | 242,300 | Total liabilities and equity | $ | 242,300 | |
* 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
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