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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education