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.) Complete this question by entering your answers in the tabs below. Reg 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11
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.) Complete this question by entering your answers in the tabs below. Reg 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Can you please check my work

Transcribed Image Text:Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts
at December 31 of the prior year were inventory, $53,900; total assets, $219,400; common stock, $84,000; and retained earnings,
$37,047.)
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Sales
Cost of goods sold
Gross profit
Operating expenses
Interest expense
$ 449,600
297,750
151,850
99,300
4,400
48,150
19,397
Income before taxes
Income tax expense
Net income
$
28,753
CABOT CORPORATION
Balance Sheet
December 31
Assets
Liabilities and Equity
Accounts payable
Accrued wages payable
Income taxes payable
32,150 Long-term note payable, secured by
mortgage on plant assets
Common stock
Cash
$ 14,000
8,600
30,600
$
16,500
3,600
2,900
67,400
Short-term investments
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
2,550
152,300 Retained earnings
84,000
65,800
$ 240,200
Total assets
$ 240,200
Total liabilities and equity

Transcribed Image Text: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, (1O) return on total assets, and (11) return
on common stockholders' equity. (Do not round intermediate calculations.)
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Req 3
Req 4
Req 5
Req 6
Req 7
Req 8
Req 9
Req 10
Req 11
Compute the return on common stockholders' equity.
(11)
Return on Common Stockholders' Equity.
Choose Numerator:
Choose Denominator
Return On Common Stockholders' Equity
Current assets
Current liabilities
I Average common stockholders' equity
Return on common stockholders' equity
2$
14,000
2$
86,000| /
2$
23,000
(313.0) %
%3D
< Req 10
Req 11 >
Expert Solution

Step 1
Common stock: These are the shares issued by a company to an outsider. These shares entitle a share of ownership to the person acquired them. The holders of these shares will have voting powers and can elect the board of directors. In the event of liquidation, the holders of these shares will get a right on corporation's assets only after the preferred debts were paid off.
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