Current ratio = Current assets / Current liabilities
Current ratio = $22000+9400+29600+5500+34150+3100 / $16500+3200+3400
Current ratio = $103,750 / 23,100 = 4.49
Acid test ratio = Current assets - inventory - prepaid expenses / Current liabilities
Acid test ratio = $103750-34150-3100 / 23100
Acid test ratio = $66,500 / 23,100 = 2.88
Days sales uncollected = Accounts receivable / Sales * 365 days
Days sales uncollected = $29,600 / 451,600 * 365 = 24 days
Inventory turnover = Cost of goods sold / Average inventory
Inventory turnover = $298,050 / (50,900+34,150/2)
Inventory turnover = $298,050 / $42,525 = 7
Days sales in inventory = 365 / Inventory turnover
Days sales in inventory = 365 / 7 = 52 days
Debt to equity ratio = Total liabilities / Total stockholders equity
Debt to equity ratio = $16500+3200+3400+68400 / 90000+73550
Debt to equity ratio = $91,500 / 163,550 = 0.56 or 56%
Times interest earned = Earnings before interest and tax / Interest expense
Times interest earned = $153550-99000 / 3900
Times interest earned = $54,550 / 3,900 = 14
Profit margin ratio = Net income / Sales * 100
Profit margin ratio = $30,246 / 451,600 *100 = 6.7%
Total asset turnover = Sales / Average total assets
Total asset turnover = $451,600 / (249,400+255,050 /2)
Total asset turnover = $451,600 / 252,225 = 1.79
Return on total asset = Net income / Average total assets
Return on total asset = $30,246 / 252,225 *100 = 12%
Return on common stockholders equity = Net income / Average common stockholders equity
Return on common stockholders equity = $30,246 / (133,304+163,550/2)
Return on common stockholders equity = $30,246 / 148,427 *100 = 20.4%
Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation...
Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $49,900; total assets, $259,400; common stock, $88,000; and retained earnings, $28,484.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales $451,600 Cost of goods sold 297,950 Gross profit 153,650 Operating expenses 98,600 Interest expense 4,200 Income before taxes 50,850 Income taxes 20,484 Net income $30,366 CABOT...
Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $49,900; total assets, $179,400; common stock, $85,000; and retained earnings, $37,004.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 $451,600 297,850 153,750 98,800 4,300 50,650 20,404 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income taxes $ 30,246 Net income...
Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit, selected balance sheet amounts at December 31, 2016, were inventory, $53,900; total assets, $259,400; common stock, $83,000; and retained earnings, $57,668.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income taxes Net income $ 456,600 297,950 158,650 98,600 4,400 55,650 22,418 $...
Che Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit: selected balance sheet amounts at December 31, 2016, were inventory, $55,900; total assets, $249,400; common stock, $80,000, and retained earnings. $54,510.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales $ 447,600 Cost of goods sold 297,450 Gross profit 150, 150 Operating expenses 99,400 Interest expense 4,800 Income before taxes 45,950 Income taxes 18,510 Net...
Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $47,900; total assets, $209,400, common stock, $90,000; and retained earnings, $37,678.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales $ 453,600 Cost of goods sold 298,450 Gross profit 155, 150 Operating expenses 99,200 Interest expense 4,000 Incone before taxes 51,950 Income taxes 20,928 Net Income...
Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $50,900; total assets, $249,400; common stock, $90,000; and retained earnings, $43,304.) CABOT CORPORATION Income Statement Por Year Ended December 31, 2017 Sales $ 451,600 Cost of goods sold 298,050 Gross profit 153,550 Operating expenses 99,000 Interest expense 3,900 Income before taxes 50,650 Income taxes 20,404 Net income $...
Che Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit: selected balance sheet amounts at December 31, 2016, were inventory, $55,900; total assets, $249,400; common stock, $80,000, and retained earnings, $54,510.) CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales $ 447,600 Cost of goods sold 297,452 Gross profit 150, 150 Operating expenses 99,400 Interest expense 4,800 Income before taxes 45,950 Income taxes 18,510 Net...
Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2017, were inventory, $55,900; total assets, $189,400; common stock, $89,000; and retained earnings, $33,378.) CABOT CORPORATION Income Statement For Year Ended December 31, 2018 Sales $ 455, 600 Cost of goods sold 296,850 Gross profit 158,750 Operating expenses 98,700 Interest expense 4,500 Income before taxes 55,550 Income tax expense 22,378 Net...
Problem 13-4A Calculating financial statement ratios LO P3 Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selo at December 31 of the prior year were inventory, $50,900; total assets, $209,400; common stock, $83,00 $54,315.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 452,600 Cost of goods sold 297,550 Gross profit 155,050 Operating expenses 99,500 Interest expense 4,500 Income before taxes 51,050 Income tax expense 20,565 Net income $ 30,485 $...
Problem 13-4A 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, $50,900; total assets, $169,400; common stock, $84,000; and retained earnings, $31,305.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 455,600 Cost of goods sold 297,350 Gross profit 158,250 Operating expenses 98,800 Interest expense 4,700 Income before taxes 54,750 Income tax expense...