Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2014, were inventory, $52,900; total assets, $189,400; common stock, $86,000; and retained earnings, $42,757.) CABOT CORPORATION Income Statement For Year Ended December 31, 2015 Sales $453,600 298,550 Cost of goods sold 155,050 Gross profit Operating expenses 99,000 Interest expense 4,400 Income before taxes 51,650 Income taxes 20,807 Net income $30,843 CABOT CORPORATION Balance Sheet December 31, 2015 Assets Liabilities and Equity Cash $10,000 Accounts payable $18,500 Accrued wages Short-term investments 8,800 4,400 payable Accounts receivable, 30,200 Income taxes payable 3,700 net Notes receivable Long-term note (trade)" 8,000 payable, secured Merchandise inventory 40,150 by mortgage on plant 63,400 assets Prepaid expenses 3,150 Common stock 86,000 149,300 Plant assets, net Retained earnings 73,600 Total assets $249,600 Total liabilities and equity $249,600 * 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.) (1) Choose Numerator: Current Ratio Choose Denominator: Current Ratio Current ratio to 1 2015: = (2) Choose Numerator: Acid-Test Ratio Choose = Denominator: = Acid-Test Ratio Acid-test ratio to 1 2015: = (3) Choose Numerator: Days Sales Uncollected Choose Denominator: x Days = Days Sales Uncollected X Days sales uncollected 2015: days Choose Numerator: Inventory Turnover Choose Inventory Denominator: Turnover = Inventory turnover times 1 1 2015: = (5) Choose Numerator: Days' Sales in Inventory Choose Denominator: x Days = 1 Days' Sales in Inventory Days' sales in inventory days X 2015: (6) Choose Numerator: - Debt-to-Equity Ratio Choose Debt-to-Equity Denominator: Ratio Debt-to-equity ratio = to 1 1 1 2015: (7) Choose Numerator: Times Interest Earned Choose Denominator: 1 Times Interest Earned Times interest earned 2015: / = times (8) Choose Numerator: Profit Margin Ratio Choose Denominator: Profit margin ratio Profit margin ratio 2015: 1 % (9) Choose Numerator: Total Asset Turnover Choose Total Asset Denominator: Turnover Total asset = turnover times 2015: (10) Choose Numerator: Return on Total Assets Choose Return on Total Denominator: Assets Return on total = assets 2015: 1 % (11) Choose Numerator: 1 Return on Common Stockholders' Equity Return On Common Choose Denominator Stockholders' Equity Return on common stockholders' equity = 2015: %
