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, $52,900; 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, $52,900; total assets, $179,400; common stock, $84,000; and retained earnings, $48,048.) |
CABOT CORPORATION Income Statement For Year Ended December 31, 2015 | ||
Sales | $ | 451,600 |
Cost of goods sold |
| 296,950 |
| ||
Gross profit |
| 154,650 |
Operating expenses |
| 98,600 |
Interest expense |
| 3,800 |
| ||
Income before taxes |
| 52,250 |
Income taxes |
| 21,048 |
| ||
Net income | $ | 31,202 |
| ||
CABOT CORPORATION Balance Sheet December 31, 2015 | ||||||
Assets |
|
|
| Liabilities and Equity |
|
|
Cash | $ | 22,000 |
| Accounts payable | $ | 18,500 |
Short-term investments |
| 8,200 |
| Accrued wages payable |
| 2,800 |
Accounts receivable, net |
| 30,400 |
| Income taxes payable |
| 3,700 |
Notes receivable (trade)* |
| 7,000 |
| Long-term note payable, secured |
|
|
Merchandise inventory |
| 40,150 |
| by mortgage on plant assets |
| 71,400 |
Prepaid expenses |
| 2,600 |
| Common stock |
| 84,000 |
Plant assets, net |
| 149,300 |
| Retained earnings |
| 79,250 |
|
|
| ||||
Total assets | $ | 259,650 |
| Total liabilities and equity | $ | 259,650 |
|
|
| ||||
* 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.) |
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