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, $49,900; total assets, $179,400; common stock, $84,000; and retained earnings, $35,896.) CABOT CORPORATION Balance Sheet December 31 of current year Assets Liabilities and Equity Cash $ 20,000 Accounts payable $ 17,500 Short-term investments 8,200 Accrued wages payable 4,200 Accounts receivable, net 31,400 Income taxes payable 4,300 Merchandise inventory 36,150 Long-term note payable, secured by mortgage on plant assets 69,400 Prepaid expenses 2,850 Common stock 84,000 Plant assets, net 147,300 Retained earnings 66,500 Total assets $ 245,900 Total liabilities and equity $ 245,900 CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 450,600 Cost of goods sold 296,950 Gross profit 153,650 Operating expenses 98,600 Interest expense 3,800 Income before taxes 51,250 Income tax expense 20,646 Net income $ 30,604 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 interest earned (8) profit margin ratio (9) total asset turnover (10) return on total assets (11) return on equity. Note: Do not round intermediate calculations.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 50E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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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, $49,900; total assets, $179,400; common stock, $84,000; and retained earnings, $35,896.)

CABOT CORPORATION
Balance Sheet
December 31 of current year
Assets		Liabilities and Equity
Cash	$ 20,000	Accounts payable	$ 17,500
Short-term investments	8,200	Accrued wages payable	4,200
Accounts receivable, net	31,400	Income taxes payable	4,300
Merchandise inventory	36,150	Long-term note payable, secured by mortgage on plant assets	69,400
Prepaid expenses	2,850	Common stock	84,000
Plant assets, net	147,300	Retained earnings	66,500
Total assets	$ 245,900	Total liabilities and equity	$ 245,900

CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Sales	$ 450,600
Cost of goods sold	296,950
Gross profit	153,650
Operating expenses	98,600
Interest expense	3,800
Income before taxes	51,250
Income tax expense	20,646
Net income	$ 30,604