Question: Selected year-end financial statements of Cabot
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings, $22,748.)
RequiredCompute 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' data-toggle="tooltip" data-placement="top" title="Click to view definition...">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. Round to one decimal place, except for part 6 round to two decimals.
Transcribed Image Text:
CABOT CORPORATION Income Statement For Year Ended December 31, 2013 Sales.... $448,600 Cost of goods sold .. 297,250 Gross profit ... 151,350 Operating expenses 98,600 Interest expense ... 4,100 Income before taxes 48,650 Income taxes 19,598 Net income $ 29,052 CABOT CORPORATION Balance Sheet December 31, 2013 Assets Liabilities and Equity' data-toggle="tooltip" data-placement="top" title="Click to view definition...">Equity Cash $ 10,000 Accounts payable $ 17,500 Short-term investments 8,400 3,200 Accrued wages payable Income taxes payable Accounts receivable, net 29,200 3,300 Notes receivable (trade) Long-term note payable, secured by mortgage on plant assets 4,500 63,400 Merchandise inventory Prepaid expenses 32,150 2,650 Common stock 90,000 Retained earnings Total liabilities and equity Plant assets, net 153,300 62,800 Total assets $240,200 $240,200 * These are short-term notes receivable arising from customer (trade) sales.
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