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, $50,900; total assets, $259,400: common stock, $85,000; and retained earnings, $40,546.) Assets Cash Short-term investments. Accounts receivable, net Merchandise inventory Prepaid expenses $ 20,000 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable 8,600 Accrued wages payable 32,800 Income taxes payable 38,150 Long-term note payable, secured by mortgage on plant assets 2,850 Common stock. Plant assets, net 153,300 Retained earnings Total assets $ 255,700 Total liabilities and equity 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 Net income $ 455,600 297,250 158,350 98,900 4,600 54,850 22,096 $ 32,754 $ 19,500 4,600 2,900 70,400 85,000 73,300 $ 255,700 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. 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, $50,900; total assets, $259,400: common stock, $85,000; and retained earnings, $40,546.) Assets Cash Short-term investments. Accounts receivable, net Merchandise inventory Prepaid expenses $ 20,000 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable 8,600 Accrued wages payable 32,800 Income taxes payable 38,150 Long-term note payable, secured by mortgage on plant assets 2,850 Common stock. Plant assets, net 153,300 Retained earnings Total assets $ 255,700 Total liabilities and equity 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 Net income $ 455,600 297,250 158,350 98,900 4,600 54,850 22,096 $ 32,754 $ 19,500 4,600 2,900 70,400 85,000 73,300 $ 255,700 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. Note: Do not round intermediate calculations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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, $50,900; total assets, $259,400; common stock, $85,000; and retained earnings,
$40,546.)
CABOT CORPORATION
Balance Sheet
December 31 of current year
Assets
Cash
Short-term investments
Accounts receivable, net
Liabilities and Equity
$ 20,000
Accounts payable
8,600
Accrued wages payable
32,800
Income taxes payable
Merchandise inventory
Prepaid expenses.
38,150 Long-term note payable, secured by mortgage on plant assets
Plant assets, net
2,850
153,300
Common stock
Retained earnings
Total assets
$ 255,700
Total liabilities and equity
CABOT CORPORATION
Income Statement
$ 19,500
4,600
2,900
70,400
85,000
73,300
$ 255,700
For Current Year Ended December 31
Sales
Cost of goods sold
Gross profit
Operating expenses.
Interest expense
Income before taxes
Income tax expense
Net income
Required:
$ 455,600
297,250
158,350
98,900
4,600
54,850
22,096
$ 32,754
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.
Note: Do not round intermediate calculations.
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