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.)
(7) Times Interest Earned Choose Numerator: / Choose Denominator: = Times Interest Earned + / = TimesInterest Earned 2015: + / = times
(7) Times Interest Earned Choose Numerator: / Choose Denominator: = Times Interest Earned + / = TimesInterest Earned 2015: + / = times
(11) Return on Common Stockholders' Equity Choose Numerator: / Choose Denominator = Return On Common Stockholders' Equity - / = Return On Common Stockholders'Equity 2015: - / = %
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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Related questions
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.) |
