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, $53,900; 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, $53,900; total assets, $199,400; common stock, $85,000; and retained earnings, $44,155.)
CABOT CORPORATION Income Statement For Year Ended December 31, 2017
Sales $ 448,600 Cost of goods sold 297,550 Gross profit 151,050 Operating expenses 98,800 Interest expense 4,700 Income before taxes 47,550 Income taxes 19,155 Net income $ 28,395
CABOT CORPORATION Balance Sheet December 31, 2017
Assets Liabilities and Equity Cash $ 10,000 Accounts payable $ 16,500 Short-term investments 8,000 Accrued wages payable 3,200 Accounts receivable, net 31,400 Income taxes payable 3,600 Notes receivable (trade)* 6,500 Merchandise inventory 38,150 Long-term note payable, secured by mortgage on plant assets 64,400 Prepaid expenses 2,900 Common stock 85,000 Plant assets, net 148,300 Retained earnings 72,550 Total assets $ 245,250 Total liabilities and equity $ 245,250 * 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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