For each ratio, select the building block of financial statement analysis to which it best relates.
Equity Ratio
Return on total assets
Dividend Yield
Day's sales in Inventory
Liquidity/Efficiency
Book Value per Common Share
Market Prospects
Accounts Receivable Turnover
Profitability
Debt to Equity
Solvency
Times Interest Earned
Gross Margin Ratio
Acid Test Ratio
For each ratio, select the building block of financial statement analysis to which it best relates.
| Equity Ratio | |
| Return on total assets | |
| Dividend Yield | |
| Day's sales in Inventory | Liquidity/Efficiency |
| Book Value per Common Share | Market Prospects |
| Accounts Receivable Turnover | Profitability |
| Debt to Equity | Solvency |
| Times Interest Earned | |
| Gross Margin Ratio | |
| Acid Test Ratio |
Related questions
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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