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, $88,000; and retained earnings, $25,647.) CABOT CORPORATIONIncome StatementFor Current Year Ended December 31 Sales $ 456,600 Cost of goods sold 297,950 Gross profit 158,650 Operating expenses 98,900 Interest expense 4,400 Income before taxes 55,350 Income tax expense 22,297 Net income $ 33,053 CABOT CORPORATIONBalance SheetDecember 31 Assets Liabilities and Equity Cash $ 18,000 Accounts payable $ 19,500 Short-term investments 9,600 Accrued wages payable 3,600 Accounts receivable, net 30,000 Income taxes payable 4,700 Merchandise inventory 34,150 Long-term note payable, secured by mortgage on plant assets 71,400 Prepaid expenses 2,850 Common stock 88,000 Plant assets, net 151,300 Retained earnings 58,700 Total assets $ 245,900 Total liabilities and equity $ 245,900 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 common stockholders' equity. (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, $249,400; common stock, $88,000; and retained earnings, $25,647.) CABOT CORPORATIONIncome StatementFor Current Year Ended December 31 Sales $ 456,600 Cost of goods sold 297,950 Gross profit 158,650 Operating expenses 98,900 Interest expense 4,400 Income before taxes 55,350 Income tax expense 22,297 Net income $ 33,053 CABOT CORPORATIONBalance SheetDecember 31 Assets Liabilities and Equity Cash $ 18,000 Accounts payable $ 19,500 Short-term investments 9,600 Accrued wages payable 3,600 Accounts receivable, net 30,000 Income taxes payable 4,700 Merchandise inventory 34,150 Long-term note payable, secured by mortgage on plant assets 71,400 Prepaid expenses 2,850 Common stock 88,000 Plant assets, net 151,300 Retained earnings 58,700 Total assets $ 245,900 Total liabilities and equity $ 245,900 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 common stockholders' equity. (Do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected
CABOT CORPORATION Income Statement For Current Year Ended December 31 |
|||
Sales | $ | 456,600 | |
Cost of goods sold | 297,950 | ||
Gross profit | 158,650 | ||
Operating expenses | 98,900 | ||
Interest expense | 4,400 | ||
Income before taxes | 55,350 | ||
Income tax expense | 22,297 | ||
Net income | $ | 33,053 | |
CABOT CORPORATION Balance Sheet December 31 |
|||||||
Assets | Liabilities and Equity | ||||||
Cash | $ | 18,000 | Accounts payable | $ | 19,500 | ||
Short-term investments | 9,600 | Accrued wages payable | 3,600 | ||||
30,000 | Income taxes payable | 4,700 | |||||
Merchandise inventory | 34,150 | Long-term note payable, secured by mortgage on plant assets | 71,400 | ||||
Prepaid expenses | 2,850 | Common stock | 88,000 | ||||
Plant assets, net | 151,300 | Retained earnings | 58,700 | ||||
Total assets | $ | 245,900 | Total liabilities and equity | $ | 245,900 | ||
Required:
Compute the following: (1)
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