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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 income $ 27,440 $ Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade)* Merchandise inventory 18,500 3,880 3,600 CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity $ 20,000 Accounts payable 9,600 Accrued wages payable 33,600 Income taxes payable 7,500 30,150 Long-term note payable, secured by mortgage on plant assets 3,100 Common stock 152,380 Retained earnings $ 256,250 Total liabilities and equity 68,480 80,000 81,950 $ 256,250 Prepaid expenses Plant assets, net Total assets *These are short-term notes receivable 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 interest earned, (8) profit margin ratio (9) total asset turnover (10) return on total assets, and (11) return on common stockholders' equity. (Do not round Intermediate calculations.) Prev 11 of 11 !! Next Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Reg 4 Req 5 Req 6 Req 7 Req 8 Reg 9 Req 10 Compute the days' sales in inventory. (5) Days' Sales in Inventory Choose Denominator: x Days Choose Numerator: 1 - = = Days' Sales In Inventory Days' sales in inventory days 2017: i x 11 of 11 FH Next Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Reg 5 Reg 6 Req 7 Req 8 Req 9 Compute the debt-to-equity ratio. (6) Debt-to-Equity Ratio Choose Denominator: Choose Numerator: = Debt-to-Equity Ratio Debt-to-equity ratio 2017: to 1 Req 1 and 2 Req3 Reg 4 Reg 5 Reg 6 Req7 Req 8 Reg 9 Req 10 Red Compute the times interest earned. Times Interest Earned 1 Choose Denominator Choose Numerator: = Times Interest Earned Times interest earned 2017: times ( Req6 Req8 > Prev 11 of 11 !!! Next > Reg 1 and 2 Reg 3 Reg4 Req5 Reg 6 Req 8 Req 9 Req 10 Compute the profit margin ratio. Profit Margin Ratio Choose Numerator: I Choose Denominator: - Profit margin ratio Profit margin ratio 2017: Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Reg 5 Req 6 Req 7 Req 8 Req9 Compute the total asset turnover. (9) Total Asset Turnover Choose Denominator: Choose Numerator: - Total Asset Turnover Total asset tumover times 2017: S - omplete this question by entering your answers in the tabs below. 91 and 2 Reg 3 Req 4 Reg 5 Reg 6 Req 7 Req 8 Req 9 Req 1 ompute the return on total assets. 40) Choose Numerator: Return on Total Assets Choose Denominator: = Return on Total Assets Return on total assets = 17: 1 Complete this question by entering your answers in the tabs below. Reg 1 and 2 Reg 3 Req 4 Reg 5 Reg 6 Reg 7 Reg 8 Req9 Rea Rea 10 Req 10 Reg 11 Reg 11 Compute the return on common stockholders' equity. (11) Choose Numerator: merator: 1 Return on Common Stockholders' Equity Choose Denominator = Return On Common Stockholders' Equity - Return on common stockholders' equity 2017:

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