Question
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $51,900; total
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $51,900; total assets, $179,400; common stock, $85,000; and retained earnings, $53,548.) |
CABOT CORPORATION Income Statement For Year Ended December 31, 2013 | ||
Sales | $ | 452,600 |
Cost of goods sold | 297,950 | |
Gross profit | 154,650 | |
Operating expenses | 99,400 | |
Interest expense | 3,900 | |
Income before taxes | 51,350 | |
Income taxes | 20,686 | |
Net income | $ | 30,664 |
CABOT CORPORATION Balance Sheet December 31, 2013 | ||||||
Assets | Liabilities and Equity | |||||
Cash | $ | 12,000 | Accounts payable | $ | 26,500 | |
Short-term investments | 8,400 | Accrued wages payable | 2,800 | |||
Accounts receivable, net | 30,200 | Income taxes payable | 3,200 | |||
Notes receivable (trade)* | 6,500 | Long-term note payable, secured | ||||
Merchandise inventory | 38,150 | by mortgage on plant assets | 64,400 | |||
Prepaid expenses | 2,850 | Common stock | 85,000 | |||
Plant assets, net | 153,300 | Retained earnings | 69,500 | |||
Total assets | $ | 251,400 | Total liabilities and equity | $ | 251,400 | |
* 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.(Use 365 days a year. Do not round intermediate calculations.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started