Selected year-end financial statements of Cabot Corporation follow.(All sales we

Question

Selected year-end financial statements of Cabot Corporation follow.(All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $51,900; total assets, $179,400; common stock, $83,000, and retained earnings, $42,461) CABOT CORPORATION Income Statenent For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income taxes Net income 450,600 298,150 152,4 98,700 4,200 49,550 19,961 $ 29,589 CABOT CORPORATION Balance Sheet December 31, 2017 ces Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade)* Herchandise inventory Liabilities and Equity 12,000 Accounts payable 33,800 Income taxes payable 40,150 Long-term note payable, secured by 150,300 Retained earnings $ 16,500 4,400 4, 700 8,200 Accrued wages payable 4,000 70,400 mortgage on plant assets Prepaid expenses Plant assets, net Total assets 2,600 Common stock 83,000 72,050 s 251,050 050 Total liabilities and equity These are short-term notes receivable arising from customer (trade) sales. 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.) K Prex7 of 14 Next>

Explanation / Answer

Required Ratios are as computed below:

Particulars 2017 Current Assets: Cash $12,000 Short Term Investments $8,200 Accounts receivables $33,800 Notes Receivables $4,000 Merchandise Inventory 40,150 Prepaid expenses $2,600 Total current assets (a) $100,750 Current Liabilities Accounts payable $16,500 Accrued Wages Payable 4,400 Income taxes payable 4,700 Total current liabilities (b) $25,600 Current Ratio (a/b) $3.9 Particulars 2017 Current Assets: Cash $12,000 Short Term Investments $8,200 Accounts receivables $33,800 Notes Receivables $4,000 Total current assets (a) $58,000 Current Liabilities Accounts payable $16,500 Accrued Wages Payable 4,400 Income taxes payable 4,700 Total current liabilities (b) $25,600 Acid Test Ratio (a/b) $2.3

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