Selected year-end financial statements of Cabot Corporationfollow. (All sales were on credit; selected balance sheet amountsat December 31, 2015, were inventory, $55,900; total assets,$249,400; common stock, $85,000; and retained earnings,$48,092.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2016 Sales $ 453,600 Cost of goods sold 297,550 Gross profit 156,050 Operating expenses 98,800 Interest expense 3,900 Income before taxes 53,350 Income taxes 21,492 Net income $ 31,858
CABOT CORPORATION
Balance Sheet
December 31, 2016 Assets Liabilitiesand Equity Cash $ 18,000 Accounts payable $ 19,500 Short-term investments 9,400 Accrued wages payable 3,800 Accounts receivable, net 33,600 Income taxes payable 3,300 Notes receivable (trade)* 6,000 Long-term note payable,secured Merchandise inventory 36,150 by mortgage on plant assets 66,400 Prepaid expenses 2,500 Common stock 85,000 Plant assets, net 152,300 Retained earnings 79,950 Total assets $ 257,950 Total liabilities andequity $ 257,950
* 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 interestearned, (8) profit margin ratio, (9) total asset turnover, (10)return on total assets, and (11) return on common stockholders'equity. (Do not round intermediatecalculations.)
* These are short-term notes receivable arising from customer(trade) sales.
Acid-Test Ratio
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Acid-Test Ratio
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Acid-Test Ratio
2013:
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to 1
Times Interest Earned
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Times Interest Earned
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Times Interest Earned
2013:
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times
Total Asset Turnover
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Total Asset Turnover
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2013:
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times
Return on Common Stockholders' Equity
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Return On Common Stockholders' Equity
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Net income
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Average common stockholders' equity
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Return On Common Stockholders' Equity
2013:
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Selected year-end financial statements of Cabot Corporationfollow. (All sales were on credit; selected balance sheet amountsat December 31, 2015, were inventory, $55,900; total assets,$249,400; common stock, $85,000; and retained earnings,$48,092.)
| CABOT CORPORATION Income Statement For Year Ended December 31, 2016 | ||
| Sales | $ | 453,600 |
| Cost of goods sold | 297,550 | |
| Gross profit | 156,050 | |
| Operating expenses | 98,800 | |
| Interest expense | 3,900 | |
| Income before taxes | 53,350 | |
| Income taxes | 21,492 | |
| Net income | $ | 31,858 |
| CABOT CORPORATION Balance Sheet December 31, 2016 | ||||||
| Assets | Liabilitiesand Equity | |||||
| Cash | $ | 18,000 | Accounts payable | $ | 19,500 | |
| Short-term investments | 9,400 | Accrued wages payable | 3,800 | |||
| Accounts receivable, net | 33,600 | Income taxes payable | 3,300 | |||
| Notes receivable (trade)* | 6,000 | Long-term note payable,secured | ||||
| Merchandise inventory | 36,150 | by mortgage on plant assets | 66,400 | |||
| Prepaid expenses | 2,500 | Common stock | 85,000 | |||
| Plant assets, net | 152,300 | Retained earnings | 79,950 | |||
| Total assets | $ | 257,950 | Total liabilities andequity | $ | 257,950 | |
* 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 interestearned, (8) profit margin ratio, (9) total asset turnover, (10)return on total assets, and (11) return on common stockholders'equity. (Do not round intermediatecalculations.)
| * These are short-term notes receivable arising from customer(trade) sales.
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Related questions
Selected year-end financial statements of Cabot Corporationfollow. (All sales were on credit; selected balance sheet amountsat December 31, 2012, were inventory, $51,900; total assets,$179,400; common stock, $105,000; and retained earnings,$52,148.)
| CABOT CORPORATION Income Statement For Year Ended December 31, 2013 | ||
| Sales | $ | 451,600 |
| Costof goods sold | 297,150 | |
| Gross profit | 154,450 | |
| Operating expenses | 99,300 | |
| Interest expense | 4,700 | |
| Income before taxes | 50,450 | |
| Income taxes | 20,323 | |
| Netincome | $ | 30,127 |
| CABOT CORPORATION Balance Sheet December 31, 2013 | ||||||
| Assets | Liabilities and Equity | |||||
| Cash | $ | 20,000 | Accounts payable | $ | 15,500 | |
| Short-term investments | 9,000 | Accrued wages payable | 3,800 | |||
| Accounts receivable, net | 32,800 | Income taxes payable | 4,100 | |||
| Notes receivable (trade)* | 4,500 | Long-term note payable, secured | ||||
| Merchandise inventory | 42,150 | by mortgage on plant assets | 65,400 | |||
| Prepaid expenses | 3,000 | Common stock | 105,000 | |||
| Plant assets, net | 147,300 | Retained earnings | 64,950 | |||
| Total assets | $ | 258,750 | Total liabilities and equity | $ | 258,750 | |
| * These areshort-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 interestearned, (8) profit margin ratio, (9) total asset turnover, (10)return on total assets, and (11) return on common stockholders'equity. (Use 365 days a year. Do not round intermediatecalculations.) |
Problem 17-4A Calculation of financial statement ratios LOP3
Selected year-end financial statements of Cabot Corporationfollow. (All sales were on credit; selected balance sheet amountsat December 31, 2012, were inventory, $52,900; total assets,$179,400; common stock, $100,000; and retained earnings,$52,748.) |
| CABOT CORPORATION Income Statement For Year Ended December 31, 2013 | ||
| Sales | $ | 455,600 |
| Cost of goodssold | 297,450 | |
| Gross profit | 158,150 | |
| Operatingexpenses | 99,500 | |
| Interestexpense | 4,900 | |
| Income beforetaxes | 53,750 | |
| Income taxes | 21,653 | |
| Net income | $ | 32,097 |
| CABOT CORPORATION Balance Sheet December 31, 2013 | ||||||
| Assets | Liabilitiesand Equity | |||||
| Cash | $ | 14,000 | Accountspayable | $ | 25,500 | |
| Short-terminvestments | 9,400 | Accrued wagespayable | 3,800 | |||
| Accounts receivable,net | 33,200 | Income taxespayable | 4,100 | |||
| Notes receivable(trade)* | 6,500 | Long-term notepayable, secured | ||||
| Merchandiseinventory | 36,150 | bymortgage on plant assets | 62,400 | |||
| Prepaidexpenses | 2,750 | Common stock | 100,000 | |||
| Plant assets,net | 150,300 | Retainedearnings | 56,500 | |||
| Total assets | $ | 252,300 | Total liabilitiesand equity | $ | 252,300 | |
| * These are short-term notesreceivable 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 interestearned, (8) profit margin ratio, (9) total asset turnover, (10)return on total assets, and (11) return on common stockholders'equity. (Use 365 days a year. Do not round intermediatecalculations.) |
