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, $49,900; total assets, $179,400; common stock, $84,000; and retained earnings, $35,896.) CABOT CORPORATION Balance Sheet December 31 of current year Assets Liabilities and Equity Cash $ 20,000 Accounts payable $ 17,500 Short-term investments 8,200 Accrued wages payable 4,200 Accounts receivable, net 31,400 Income taxes payable 4,300 Merchandise inventory 36,150 Long-term note payable, secured by mortgage on plant assets 69,400 Prepaid expenses 2,850 Common stock 84,000 Plant assets, net 147,300 Retained earnings 66,500 Total assets $ 245,900 Total liabilities and equity $ 245,900 CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 450,600 Cost of goods sold 296,950 Gross profit 153,650 Operating expenses 98,600 Interest expense 3,800 Income before taxes 51,250 Income tax expense 20,646 Net income $ 30,604 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 (11) return on equity. Note: 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, $49,900; total assets, $179,400; common stock, $84,000; and retained earnings, $35,896.) CABOT CORPORATION Balance Sheet December 31 of current year Assets Liabilities and Equity Cash $ 20,000 Accounts payable $ 17,500 Short-term investments 8,200 Accrued wages payable 4,200 Accounts receivable, net 31,400 Income taxes payable 4,300 Merchandise inventory 36,150 Long-term note payable, secured by mortgage on plant assets 69,400 Prepaid expenses 2,850 Common stock 84,000 Plant assets, net 147,300 Retained earnings 66,500 Total assets $ 245,900 Total liabilities and equity $ 245,900 CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 450,600 Cost of goods sold 296,950 Gross profit 153,650 Operating expenses 98,600 Interest expense 3,800 Income before taxes 51,250 Income tax expense 20,646 Net income $ 30,604 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 (11) return on equity. Note: Do not round intermediate calculations.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 50E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...
Related questions
Question
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, $49,900; total assets, $179,400; common stock, $84,000; and
CABOT CORPORATION | |||
Balance Sheet | |||
December 31 of current year | |||
Assets | Liabilities and Equity | ||
Cash | $ 20,000 | Accounts payable | $ 17,500 |
Short-term investments | 8,200 | Accrued wages payable | 4,200 |
31,400 | Income taxes payable | 4,300 | |
Merchandise inventory | 36,150 | Long-term note payable, secured by mortgage on plant assets | 69,400 |
Prepaid expenses | 2,850 | Common stock | 84,000 |
Plant assets, net | 147,300 | Retained earnings | 66,500 |
Total assets | $ 245,900 | Total liabilities and equity | $ 245,900 |
CABOT CORPORATION | |
Income Statement | |
For Current Year Ended December 31 | |
Sales | $ 450,600 |
---|---|
Cost of goods sold | 296,950 |
Gross profit | 153,650 |
Operating expenses | 98,600 |
Interest expense | 3,800 |
Income before taxes | 51,250 |
Income tax expense | 20,646 |
Net income | $ 30,604 |
Required:
Compute the following:
(1)
(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
(11) return on equity.
Note: Do not round intermediate calculations.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub