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7 Problem 13-4A (Algo) Calculating financial statement ratios LO P3 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, $48,900; total assets, $189,400; common stock, $82,000; and retained earnings, $40,529.) CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity eBook Assets Cash $ 14,000 Accounts payable $ 18,500 9,400 Accrued wages payable. 3,600 Short-term investments Accounts receivable, net 30,600 Income taxes payable 3,900 38,150 64,400 Print Merchandise inventory Prepaid expenses Long-term note payable, secured by mortgage on plant assets Common stock 2,800 82,000 71,850 Plant assets, net 149,300 Retained earnings Total assets $ 244,250 Total liabilities and equity $ 244,250 CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 453,600 297,150 Cost of goods sold Gross profit 156,450 Operating expenses. 99,200 Interest expense Income before taxes Income tax expense Net income 4,800 52,450 21,129 $ 31,321 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.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 10 points ច References
Print References Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Compute the current ratio and acid-test ratio. (1) Current Ratio Numerator: Current assets (2) Numerator: Quick assets Denominator: 1 Current liabilities 1 1 1 Acid-Test Ratio Denominator: Current liabilities < Req 1 and 2 || Req 9 Current Ratio Current ratio 0 to 1 Acid-Test Ratio Acid-Test Ratio 0 to 1 = = = = = Req 3 > Req 10 Req 11
eferences Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Compute the days' sales uncollected. (3) Days' Sales Uncollected Numerator: 1 Denominator: 1 1 < Req 1 and 2 X X X Req 9 Days Req 4 > = = Req 10 Req 11 Days Sales Uncollected Days sales uncollected 0 days
References Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Compute the inventory turnover. (4) Inventory Turnover Numerator: Denominator: Inventory Turnover Inventory turnover 0 times > 1 1 1 < Req 3 = = = Req 5 Req 10 Req 11
0 nces Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Compute the days' sales in inventory. (5) Days' Sales in Inventory Numerator: 1 Denominator: Days = 1 = 1 = < Req 4 Req 6 > X X X Req 9 Req 10 Days' Sales in Inventory Days' sales in inventory 0 days Req 11
nces Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Compute the debt-to-equity ratio. (6) Debt-to-Equity Ratio Numerator: Denominator: Debt-to-Equity Ratio Debt-to-equity ratio 0 to 1 1 1 1 < Req 5 = = Req 7 > Req 10 Req 11
7 Req 1 and 2 Req 3 Req 4 Compute the times interest earned. (7) Numerator: + + Req 5 Req 7 Times Interest Earned 1 1 < Req 6 Req 6 Req 8 Denominator: Req 9 = = Req 8 > Req 10 Req 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 1 Req 5 Req 6 Profit Margin Ratio Denominator: < Req 7 Req 7 Req 8 Req 9 Profit margin ratio Profit margin ratio = = Req 9 > 0 % Req 10 Req 11
Req 1 and 2 Req 3 Req 4 Compute the total asset turnover. (9) Numerator: 1 1 1 Req 5 Req 6 Total Asset Turnover Denominator: < Req 8 Req 7 Req 8 Req 9 Total Asset Turnover Total asset turnover 0 times = = Req 10 > Req 10 Req 11
ces Req 1 and 2 Req 3 Req 4 Compute the return on total assets. (10) Numerator: 1 1 Req 5 Req 6 Return on Total Assets Denominator: < Req 9 Req 7 = = = Req 11 Req 8 Req 9 Return on Total Assets Return on total assets Req 10 0% Req 11
Req 1 and 2 Req 3 Compute the return on equity. (11) Numerator: 1 1 1 Req 4 Req 5 Req 6 Req 7 Return on Equity Denominator < Req 10 Req 8 = = = Req 11 Req 9 Req 10 Return On Equity Return on equity > Req 11 0%