Selected current year-end financial statements of CabotCorporation follow. (All sales were on credit; selected balancesheet amounts at December 31 of the prior year wereinventory, $49,900; total assets, $199,400; common stock, $86,000;and retained earnings, $34,224.)
CABOT CORPORATION
Income Statement
For Current Year Ended December 31 |
| Sales | $ | 454,600 | |
| Cost of goods sold | | 297,850 | |
| Gross profit | | 156,750 | |
| Operating expenses | | 98,500 | |
| Interest expense | | 4,200 | |
| Income before taxes | | 54,050 | |
| Income tax expense | | 21,774 | |
| Net income | $ | 32,276 | |
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CABOT CORPORATION
Balance Sheet
December 31 |
| Assets | | | | Liabilities and Equity | | | |
| Cash | $ | 12,000 | | Accounts payable | $ | 16,500 | |
| Short-term investments | | 8,400 | | Accrued wages payable | | 4,600 | |
| Accounts receivable, net | | 30,000 | | Income taxes payable | | 4,300 | |
| Merchandise inventory | | 38,150 | | Long-term note payable, secured by mortgage on plantassets | | 64,400 | |
| Prepaid expenses | | 2,450 | | Common stock | | 86,000 | |
| Plant assets, net | | 151,300 | | Retained earnings | | 66,500 | |
| Total assets | $ | 242,300 | | Total liabilities and equity | $ | 242,300 | |
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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 ininventory, (6) debt-to-equity ratio, (7) times interest earned, (8)profit margin ratio, (9) total asset turnover, (10) return on totalassets, and (11) return on common stockholders' equity. (Donot round intermediate calculations.)
