Reference no: EM132954351
Selected current year-end financial statements of Cabot Corporation follow.
(All sales were on credit; selected balance sheet amounts at December 31 of the were inventory, $49,900; total assets, $229,400; common stock, $90,000; and retained earnings, $31,022.)
December 31
Assets Liabilities and Equity
Cash$10,000
Accounts payable$16,500
Short-term investments $8,600
Accrued wages payable $4,600
Accounts receivable, net $32,200
Income taxes payable $4,600
Merchandise inventory $36,150
Long-term note payable, secured by mortgage on plant assets $65,400
Prepaid expenses $2,700
Common stock $90,000
Plant assets, net $152,300
Retained earnings $60,850
Total assets$241,950
Total liabilities and equity$241,950
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Sales $451,600
Cost of goods sold $297,250
Gross profit $154,350
Operating expenses $99,600
Interest expense $4,800
Income before taxes $49,950
Income tax expense $20,122
Net income $29,828
Required:
Problem 1: 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.