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.)
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.) |
Related questions
Selected year-end financial statements of Cabot Corporationfollow. (All sales were on credit; selected balance sheet amountsat December 31, 2014, were inventory, $48,900; total assets,$189,400; common stock, $90,000; and retained earnings,$22,748.) |
| CABOT CORPORATION Income Statement For Year Ended December 31, 2015 | ||
| Sales | $ | 448,600 |
| Cost of goodssold | 297,250 | |
| Gross profit | 151,350 | |
| Operatingexpenses | 98,600 | |
| Interestexpense | 4,100 | |
| Income beforetaxes | 48,650 | |
| Income taxes | 19,598 | |
| Net income | $ | 29,052 |
| CABOT CORPORATION Balance Sheet December 31, 2015 | ||||||
| Assets | Liabilitiesand Equity | |||||
| Cash | $ | 10,000 | Accountspayable | $ | 17,500 | |
| Short-terminvestments | 8,400 | Accrued wagespayable | 3,200 | |||
| Accounts receivable,net | 29,200 | Income taxespayable | 3,300 | |||
| Notes receivable(trade)* | 4,500 | Long-term notepayable, secured | ||||
| Merchandiseinventory | 32,150 | bymortgage on plant assets | 63,400 | |||
| Prepaidexpenses | 2,650 | Common stock | 90,000 | |||
| Plant assets,net | 153,300 | Retainedearnings | 62,800 | |||
| Total assets | $ | 240,200 | Total liabilitiesand equity | $ | 240,200 | |
| * 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. (Do not round intermediatecalculations.)
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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.) |
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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