Question

Problem 13-4A Calculation of financial stetement ratios LO P3 Selected yearend financial statements of Cabot Corporation follow. (All sales were on credit selected balance December 31. 2017 were inventory, $50,900: total assets. $229,400; com she mon stock. $87000; and retained earnin ION Income Statement Sales S 448 600 297 450 151, 150 99,600 Coat of gooda soid Gross profit Operating expenses Interest expense Income before taxes Incomel tax expense 4,400 47, 150 18,994 s28,156 Netlincome CABOT CORPORATION Balancel Sheet Liabilities and Equity Assets Cashl short-term investments Accounts receivablexiti net Merchandise inventOry s 18,500 3,200 3 200 s 10 00o Accounts payab1 9,200 Accrued wages payable 29,200 Income axes payable 34, 150Long cerm hote payable secured by 65, 400 87 000 57,100 S: 234,400 moztgage on plant assets 2 5S0 Common stock 149 300 Retained earnings Prepaid expenpes Plant assetshet Total asseta s 234. 400 Total 1zabilaties and equity Required: tn ildales uncollected 4) inventory turnover 5) day Required: Compute the following: (1) current ratio. (2) acid-test ratio. (3) days sales uncollected. (4) inventory turnover (5) days's (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio. (9) total asset turnover, (10) return on total asse on common stockholders' equity. (Do not round intermediate colculations.) Complete this question by entering your answers in the tabs below. Req 4 Req 1 and 2 Req 3 Req 6 Req 7Req 8 Reg 9Req 10 Req 11 Compute the times interest earned rest Eamesd | Choose Denominator: Times Interest Earned f: Choose Nümerator: , Times interest earned 0 times 2018: 《 Req 6 S 234 400 and SSHICY uired pute the following: (1 current ratio. (2) acid-test ratio, (3) days sales uncollected. 4 inventory tunover (5) days lebt-to-equity ratio. (7) times interest earned. (8) profit man in ratio. (9) total asset turnover, (10) return on total ass ommon stockholders' equity (Do not round intermediate calculetions.) omplete this question by entering your answers in the tabs below. g 1 and 2Req 3 ompute the profit margin rato. 8) Req 5 Req 6Req 7 Req 4 Req 8Reg 9 Req 10Reg 11 ofit Margin Ratio Profit margin ratio 18: $ 234.400 Total iiabiisties and equity Total assets $ 234 400 quired: mpute the following: (1) current ratio. (2) acid-test ratio. (3) days sales uncollected (4) inventory turnover. (5) days' sales debt-to-equity ratio. ) times interest earned, (8) profit margin ratio. (9) total asset turnover, (10) return on total assets, a common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below ea 1 and 2Reg 3Reg 4 Compute the return on total assets (10) Req 5 Reg6 Rea7Rea 8Req 9 Req 10 Req 11 Total Assets = Return on total assets 018 01%

Answer 1

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Statement of Earnings	2018	2017		Current Ratio
Net Sales	448,600.00			Current Assets/Current Liabilities	3.42
Cost of goods sold	297,450.00
Gross Profit	151,150.00			Quick Ratio
Operating Expense	99,600.00			Quick Assets/Current Liabilities	1.94
Operating Income	51,550.00
Interest Expense	4,400.00			Number of days sales uncollected
Income before taxes	47,150.00			Accounts Receivables/Sales*365 days	23.76
Income tax expense	18,994.00
Net Income	28,156.00			Inventory Turnover
				Cost of goods sold/Average Inventory	6.99
Statement of Financial Position
Assets				Days sales outstanding
Current Assets				365/Inventory Turnover	52.18
Cash	10,000.00
Short Term Investments	9,200.00			Debt to Equity Ratio
Accounts Receivable	29,200.00			Total Liabilities /Total Stockholders' Equity	0.63
Inventory	34,150.00
Prepaid Expense	2,550.00			Times Interest Earned
Total Current Assets	85,100.00			Operating Income/Interest Expense	11.7
Plant assets, net	149,300.00
Total Assets	234,400.00			Profit margin %
				Net Income/Net Sales	6.28%
Liabilities & Stockholders' Equity
Liabilities				Total Assets Turnover Ratio
Current Liabilities				Sales Revenue/Average Assets	1.93
Accounts Payable	18,500.00
Accrued Wages Payable	3,200.00			Return on Total Assets
Income Tax Payable	3,200.00			Net Income/Total Assets	12.01%
Total Current Liabilities	24,900.00
Long Term Note payable	65,400.00			Return on Common Stock holders Equity
Long Term Liabilities	65,400.00			Net Income/Common Stock holders Equity	19.54%
Total Liabilities	90,300.00
Common Stock	87,000.00
Retained Earnings	57,100.00
Total Stockholders' Equity	144,100.00
Total Liabilities & Stockholders' Equity	234,400.00
Total Current Assets	85,100.00
Less:
Inventory	34,150.00
Prepaid Expense	2,550.00
Quick Assets	48,400.00
Inventory	34,150.00	50,900.00
Average Inventory	42,525.00
Total assets	234,400.00	229,400.00
Average assets	231,900.00