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, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings, $33,748.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Sales Cost of goods sold Gross profit $ 10,000 8,400 CABOT CORPORATION Income Statement For Current Year Ended December 31 Operating expenses Interest expense Income before taxes Income tax expense Net income 33,700 32,150 2,650 153,300 Retained earnings $ 240,200 Total liabilities and equity $ 448,600 297,250 151,350 98,600 4,100 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 48,650 19,598 $ 29.052 Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock $ 17,500 3,200 3,300 63,400 90,000 62,800 $ 240,200
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, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings, $33,748.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Sales Cost of goods sold Gross profit $ 10,000 8,400 CABOT CORPORATION Income Statement For Current Year Ended December 31 Operating expenses Interest expense Income before taxes Income tax expense Net income 33,700 32,150 2,650 153,300 Retained earnings $ 240,200 Total liabilities and equity $ 448,600 297,250 151,350 98,600 4,100 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 48,650 19,598 $ 29.052 Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock $ 17,500 3,200 3,300 63,400 90,000 62,800 $ 240,200
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PB
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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, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings,
$33,748.)
Assets
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Sales
Cost of goods sold
Gross profit
$ 10,000
8,400
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Operating expenses
Interest expense
Income before taxes
Income tax expense
Net income
33,700
32,150
2,650
153,300
$ 240, 200
$448,600
297,250
151,350
98,600
4,100
48,650
19,598
$ 29,052
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
$ 17,500
3,200
3,300
63,400
90,000
62,800
$ 240,200
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc6a7273-7680-466f-89c6-36324702eea4%2Fdca93267-aafc-4479-b59d-c294588a152d%2Fnvnnlph_processed.png&w=3840&q=75)
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, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings,
$33,748.)
Assets
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Sales
Cost of goods sold
Gross profit
$ 10,000
8,400
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Operating expenses
Interest expense
Income before taxes
Income tax expense
Net income
33,700
32,150
2,650
153,300
$ 240, 200
$448,600
297,250
151,350
98,600
4,100
48,650
19,598
$ 29,052
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
$ 17,500
3,200
3,300
63,400
90,000
62,800
$ 240,200
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.
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