Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4)...
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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 year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $47,900; total assets, $229,400; common stock, $85,000; and retained earnings, $43,279.)
CABOT CORPORATION Income Statement For Year Ended December 31, 2017
Sales
$
456,600
Cost of goods sold
297,350
Gross profit
159,250
Operating expenses
99,100
Interest expense
4,100
Income before taxes
56,050
Income taxes
22,579
Net income
$
33,471
CABOT CORPORATION Balance Sheet December 31, 2017
Assets
Liabilities and Equity
Cash
$
22,000
Accounts payable
$
18,500
Short-term investments
9,400
Accrued wages payable
5,000
Accounts receivable, net
32,200
Income taxes payable
3,900
Notes receivable (trade)*
6,000
Merchandise inventory
36,150
Long-term note payable, secured by mortgage on plant assets
72,400
Prepaid expenses
2,500
Common stock
85,000
Plant assets, net
153,300
Retained earnings
76,750
Total assets
$
261,550
Total liabilities and equity
$
261,550
* These are short-term notes receivable arising from customer (trade) sales.
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