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, $51,900; total assets, $169,400; common stock, $85,000; and retained earnings, $45,550) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity $ 22,000 Accounts payable $ 15,500 8,800 Accrued wages payable 4,000 33,400 Income taxes payable 3,700 34,150 Long-term note payable, secured by mortgage on plant assets 70,400 2,850 Common stock 85,000 152,300 $253,500 Retained earnings 74,900 Total liabilities and equity $ 253,500 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 $ 450,600 298,050 152,550 98,900 4,500 49,150 19,800 $ 29,350 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, $51,900; total assets, $169,400; common stock, $85,000; and retained earnings, $45,550) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity $ 22,000 Accounts payable $ 15,500 8,800 Accrued wages payable 4,000 33,400 Income taxes payable 3,700 34,150 Long-term note payable, secured by mortgage on plant assets 70,400 2,850 Common stock 85,000 152,300 $253,500 Retained earnings 74,900 Total liabilities and equity $ 253,500 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 $ 450,600 298,050 152,550 98,900 4,500 49,150 19,800 $ 29,350 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, $51,900; total assets, $169,400; common stock, $85,000; and retained earnings,
$45,550.)
Assets
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
CABOT CORPORATION
Income Statement
CABOT CORPORATION
Balance Sheet
December 31 of current year
Liabilities and Equity
$ 22,000
Accounts payable
8,800
Accrued wages payable
33,400
Income taxes payable
34,150
Long-term note payable, secured by mortgage on plant assets
2,850
152,300
Common stock
Retained earnings
$ 253,500
Total liabilities and equity
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
$ 450,600
298,050
152,550
98,900
4,500
49,150
19,800
$ 29,350
$ 15,500
4,000
3,700
70,400
85,000
74,900
$ 253,500
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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