Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance

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Selected Current Year End Financial Statements Of Cabot Corporation Follow All Sales Were On Credit Selected Balance 1 (42.61 KiB) Viewed 11 times

Selected Current Year End Financial Statements Of Cabot Corporation Follow All Sales Were On Credit Selected Balance 2 (18.22 KiB) Viewed 11 times

Selected Current Year End Financial Statements Of Cabot Corporation Follow All Sales Were On Credit Selected Balance 3 (20.24 KiB) Viewed 11 times

Selected Current Year End Financial Statements Of Cabot Corporation Follow All Sales Were On Credit Selected Balance 4 (20.87 KiB) Viewed 11 times

Selected Current Year End Financial Statements Of Cabot Corporation Follow All Sales Were On Credit Selected Balance 5 (18.64 KiB) Viewed 11 times

Selected Current Year End Financial Statements Of Cabot Corporation Follow All Sales Were On Credit Selected Balance 6 (18.97 KiB) Viewed 11 times

Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $54,900; total assets, $209,400; common stock, $89,000; and retained earnings, $35,736.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 16,000 9,200 Operating expenses Interest expense Income before taxes Income tax expense: Net income CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 452,600 298,350 Cost of goods sold Gross profit 154,250 99,000 3,900 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity 34,200 Income taxes payable 40,150 Long-tera note payable, secured by mortgage on plant assets 2,450 Common stock 147,300 Retained earnings $ 249,300 Total liabilities and equity 51,350 20,686 $ 30,664 Accounts payable Accrued wages payable $ 17,500 2,800 4,200 69,400 89,000 66,400 $ 249,388 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 equity. (Do not round intermediate calculations.)

Req 1 and 2 Req 3 Reg 4 Compute the times interest earned. Numerator Req 5 Req 6 Reg 7 Times Interest Earned 1 < Req6 Req 8 Denominator: Reg 9. = Reqa > Reg 10 Reg 11 Times Interest Earned Times interest earned 0 times

Req 1 and 2 Req 3 Req 4 Compute the profit margin ratio. (8) Numerator: 1 Req 5 Profit Margin Ratio Denominator: < Req 6 Req 7 Req 7 = = Req B Req 9 Req 9 Profit margin ratio Profit margin ratio > 0% Req 10 Req 11

Req 1 and 2 Req 3 (9) Compute the total asset turnover. Req 4 Numerator: / 1 1 Req 5 Req 6 Total Asset Turnover Denominator: < Req 8 Req 7 M = = Req 8 Total Asset Turnover Total asset turnover 0 times Req 10 Req 9 > Req 10 Req 11

Req 1 and 2 Req 3 Compute the return on total assets. (10) Req 4 Numerator: 1 1 Req 5 Return on Total Assets Denominator: < Req 6 Req 9 Req 7 = . Req 8 Req 9 Return on Total Assets Return on total assets Req 11 > Req 10 0% Req 11

Req 1 and 2 Req 3 (11) Compute the return on equity. Req 4 Numerator: Req 5 Req 6 Return on Equity Denominator Req 7 < Req 10 Req 8 Rag 11 Req 9 Reg 10 Return On Equity Return on equity Req 11 0%