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, $249,400; common stock, $83,000; and retained earnings, $45,605.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Cost of goods sold Gross profit CABOT CORPORATION Income Statement For Current Year Ended December 311 Sales $ 449,600 Operating expenses Interest expense Incone before taxes Income tax expense Net income Accounts payable $ 20,000 9,000 Accrued wages payable 33,600 Income taxes payable 36,150 Long-term note payable, secured by mortgage on plant assets 2,750 Common stock 153,300 Retained earnings $ 254,800 Total liabilities and equity CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 298,250 151,350 99,300 4,500 47,550 19,155 $ 28,395 $ 18,500 4,600 3,300 71,400 83,000 -74,000 $ 254,000 Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover. (5) days' sales in inventory. El debito obratio times interest earned (R) profit margin ratio (9) total asset turnover (10) return on total assets, and (1) return
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, $249,400; common stock, $83,000; and retained earnings, $45,605.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Cost of goods sold Gross profit CABOT CORPORATION Income Statement For Current Year Ended December 311 Sales $ 449,600 Operating expenses Interest expense Incone before taxes Income tax expense Net income Accounts payable $ 20,000 9,000 Accrued wages payable 33,600 Income taxes payable 36,150 Long-term note payable, secured by mortgage on plant assets 2,750 Common stock 153,300 Retained earnings $ 254,800 Total liabilities and equity CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 298,250 151,350 99,300 4,500 47,550 19,155 $ 28,395 $ 18,500 4,600 3,300 71,400 83,000 -74,000 $ 254,000 Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover. (5) days' sales in inventory. El debito obratio times interest earned (R) profit margin ratio (9) total asset turnover (10) return on total assets, and (1) return
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, $49,900; total assets, $249,400; common stock, $83,000; and retained earnings,
$45,605.)
Assets
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
Prepaid expenses.
Plant assets, net
Total assets
$ 20,000
9,000
Operating expenses
Interest expense
Income before taxes
Income tax expense
Net income.
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Sales
$ 449,600
298,250
Cost of goods sold
Gross profit
151,350
99,300
4,500
47,550
19,155
$ 28,395
CABOT CORPORATION
Balance Sheet
December 31 of current year
Liabilities and Equity
Accounts payable
Accrued wages payable
33,600 Incone taxes payable
36,150 Long-tern note payable, secured by mortgage on plant assets
Common stock
2,750
153,300 Retained earnings
$254,800 Total liabilities and equity
$ 18,500
4,600
3,300
71,400
83,000
-74,000
$254,000.
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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