Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2015, were inventory, $48,900; total assets, $229,400, common stock, $80,000, and retained earnings, $38,730.) CABOT CORPORATION Income Statement For Year Ended December 31, 2016 Sales $ 449,600 Cost of goods sold 297,050 Gross profit 152,550 Operating expenses 98,500 Interest expense 4,700 Income before taxes 49,350 Income taxes 19,880 Net income $ 29,470 $ 16,500 4,800 CABOT CORPORATION Balance Sheet December 31, 2016 Liabilities and Equity $ 8,000 Accounts payable 8,200 Accrued wages payable 32,000 Income taxes payable 3,500 Long-term note payable, secured 38,150 by mortgage on plant assets 2,750 Common stock 148,300 Retained earnings $240,900 Total liabilities and equity Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade) Merchandise inventory Prepaid expenses Plant assets, net Total assets 3,000 68,400 80,000 68,200 $240,900 * 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) Current Ratio Choose Numerator: 1 Choose Denominator: Current Ratio Current ratio 1 2016: 1 to 1 (2) Acid-Test Ratio Choose Denominator: Choose Numerator: 1 Acid-Test Ratio Acid-test ratio 2016: to 1 (3) Days Sales Uncollected Choose Denominator: Days Choose Numerator: = Days Sales Uncollected Days sales uncollected 0 days 2016: 1 X = (4) Inventory Turnover Choose Denominator: Choose Numerator: = Inventory Turnover Inventory turnover times 2016: (5) Days' Sales in Inventory Choose Denominator: Choose Numerator: Days Days' Sales in Inventory Days' sales in inventory 0 days 2016: 1 (6) Debt-to-Equity Ratio Choose Denominator: Choose Numerator: = Debt-to-Equity Ratio Debt-to-equity ratio 1 2016: to 1 (7) Times Interest Earned Choose Numerator: 1 Choose Denominator: = Times Interest Earned Times interest earned 2016: 1 times (8) Profit Margin Ratio 1 Choose Denominator: Choose Numerator: Profit margin ratio = Profit margin ratio 2016: (9) Total Asset Turnover 1 Choose Denominator: Choose Numerator: Total Asset Turnover Total asset turnover times 2016: 1 (10) Return on Total Assets 1 Choose Denominator: Choose Numerator: Return on Total Assets Return on total assets 11 2016: 1 11 % (10) Return on Total Assets Choose Denominator: Choose Numerator: Return on Total Assets Return on total assets 2016: (11) Choose Numerator: Return on Common Stockholders' Equity Choose Denominator = Return On Common Stockholders' Equity Return on common stockholders' equity 2016
