Question

CABOT CORPORATION Balance Sheet December 31, 2817 Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade) Merchandise inventory Liabilities and Equity $12,e8 Accounts payable 28,888 Income taxes payable 38,15e Long-term note payable, secured by $15,58e 4,000 3,188 8, Accrued wages payable 5,580 65,488 mortgage on plant assets Prepaid expenses Plant assets, net Total assets 3,ee Common stock 154,3e8 Retained earnings 77,75e 249,758 Total liabilities and equity $ 249,75e These are short-term notes recelvable arising from customer (trade) sales. Requlrec 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 Interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equlty. (Do not round Intermedlete celculetions.) Complete this question by entering your answers in the tabs below Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the debt-to-equity ratio Debt-to-Equity Ratio Choose Numerator: | 1 | Choose Denominator: | Debt-to-E quity Ratio = otal liabilities Total equity - Debt-to-equity ratio 2017: S 181.7501 0.21 to 1 < Req 5 Req 7>

Answer 1

(6)	Debt-to-Equity Ratio
	Choose Numerator:	/	Choose Denominator:	=	Debt-to-Equity Ratio
	Total liabilities	/	Total equity	=	Debt-to-equity ratio
2017:	88000	/	161750	=	0.54	to 1

Working:

Total liabilities:
Accounts payable	15500
Accrued wages payable	4000
Income taxes payable	3100
Long-term note payable	65400
Total liabilities	88000
Total equity:
Common stock	84000
Retained earnings	77750
Total equity	161750