Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance...
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Accounting
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2014, were inventory, $47,900; total assets, $199,400; common stock, $81,000; and retained earnings, $32,837.)
CABOT CORPORATION Income Statement For Year Ended December 31, 2015
Sales
$
453,600
Cost of goods sold
297,950
Gross profit
155,650
Operating expenses
99,500
Interest expense
4,300
Income before taxes
51,850
Income taxes
20,887
Net income
$
30,963
CABOT CORPORATION Balance Sheet December 31, 2015
Assets
Liabilities and Equity
Cash
$
12,000
Accounts payable
$
19,500
Short-term investments
9,000
Accrued wages payable
4,800
Accounts receivable, net
32,800
Income taxes payable
3,800
Notes receivable (trade)*
4,000
Long-term note payable, secured
Merchandise inventory
32,150
by mortgage on plant assets
69,400
Prepaid expenses
3,050
Common stock
81,000
Plant assets, net
149,300
Retained earnings
63,800
Total assets
$
242,300
Total liabilities and equity
$
242,300
* 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
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