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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, $46,900; total assets, $179,400; common stock, $89,000; and retained earnings, $35,332.) Mc Assets Cash Short-term investments Accounts receivable, net Graw Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 16,000 8,200 28,600 38,150 2,850 149,300 $ 243,100 CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Set income $ 451,600 298,150 153,450 99,000 4,600 49,850 20,082 $ 29,768 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable. Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings Total liabilities and equity $ 19,500 3,000 3,100 63,400 89,000 65,100 $ 243,100 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 equity. (Do not round intermediate calculations)

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, $46,900; total assets, $179,400; common stock, $89,000; and retained earnings, $35,332.) Mc Assets Cash Short-term investments Accounts receivable, net Graw Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 16,000 8,200 28,600 38,150 2,850 149,300 $ 243,100 CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Set income $ 451,600 298,150 153,450 99,000 4,600 49,850 20,082 $ 29,768 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable. Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings Total liabilities and equity $ 19,500 3,000 3,100 63,400 89,000 65,100 $ 243,100 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 equity. (Do not round intermediate calculations)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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S Assets Cash Short-term investments Accounts receivable, net Mc Graw Hill 1 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, $46,900; total assets, $179,400; common stock, $89,000; and retained earnings, $35,332.) Merchandise inventory Prepaid expenses Plant assets, net Total assets F1 CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 451,600 Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income C F2 # 80 $ 16,000 8,200 28,600 38,150 2,850 149,300 $ 243,100 $ 298,150 153,450 99,000 4,600 board 49,850 20,082 $ 29,768 % SEDU 1011 (2019-F... CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 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 equity. (Do not round intermediate calculations.) (* Saved Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings Total liabilities and equity < Prev D 1 of 1 & G Annotated Bibliog... $2F%252Flms.... Û ☆ Next 3: DD A Study on the He.... G Gmail 4 F10 $ 243,100 $ 19,500 3,000 3,100 63,400 89,000 65,100 F11 $ F12 D
Transcribed Image Text:S Assets Cash Short-term investments Accounts receivable, net Mc Graw Hill 1 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, $46,900; total assets, $179,400; common stock, $89,000; and retained earnings, $35,332.) Merchandise inventory Prepaid expenses Plant assets, net Total assets F1 CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 451,600 Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income C F2 # 80 $ 16,000 8,200 28,600 38,150 2,850 149,300 $ 243,100 $ 298,150 153,450 99,000 4,600 board 49,850 20,082 $ 29,768 % SEDU 1011 (2019-F... CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 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 equity. (Do not round intermediate calculations.) (* Saved Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock Retained earnings Total liabilities and equity < Prev D 1 of 1 & G Annotated Bibliog... $2F%252Flms.... Û ☆ Next 3: DD A Study on the He.... G Gmail 4 F10 $ 243,100 $ 19,500 3,000 3,100 63,400 89,000 65,100 F11 $ F12 D
Expert Solution
Explanation -

Ratio Analysis -
The ratio is the technique used by the prospective investor or an individual or strategist to read the company information in more detailed end-accurate ways.
Ratio immediately recognizes the Liquidity, Profitability, and Solvency of the company.
By using ratio analysis comparison between two companies can also be done very easily and accurately.

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