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Problem 17-4A 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, 2012, were inventory, $50,900; total assets, $189,400; common stock, $125,000; and retained earnings, $52,748.)

CABOT CORPORATION Income Statement For Year Ended December 31, 2013
Sales	$	456,600
Cost of goods sold		297,150
Gross profit		159,450
Operating expenses		98,600
Interest expense		4,200
Income before taxes		56,650
Income taxes		22,821
Net income	$	33,829

CABOT CORPORATION Balance Sheet December 31, 2013
Assets				Liabilities and Equity
Cash	$	20,000		Accounts payable	$	26,500
Short-term investments		8,800		Accrued wages payable		4,800
Accounts receivable, net		33,200		Income taxes payable		3,400
Notes receivable (trade)*		3,500		Long-term note payable, secured
Merchandise inventory		36,150		by mortgage on plant assets		70,400
Prepaid expenses		3,150		Common stock		125,000
Plant assets, net		149,300		Retained earnings		24,000
Total assets	$	254,100		Total liabilities and equity	$	254,100

* 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, (11) return on common stockholders' equity. (Use 365 days a year. Do not round intermediate calculations.)

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