Selected year- end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet

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Selected year- end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $ 48,900; total assets, $ 189,400; common stock, $ 90,000; and retained earnings, $ 22,748.)

CABOT CORPORATION

Income Statement

For Year Ended December 31, 2013

Sales . . . . . . . . . . . . . . . . . . . . . . $ 448,600

Cost of goods sold . . . . . . . . . . 297,250

Gross profit . . . . . . . . . . . . . . . . 151,350

Operating expenses . . . . . . . . . 98,600

Interest expense . . . . . . . . . . . . 4,100

Income before taxes . . . . . . . . . 48,650

Income taxes . . . . . . . . . . . . . . . 19,598

Net income . . . . . . . . . . . . . . . . $ 29,052


Selected year- end financial statements of Cabot Corporation follow. (All


Required
Compute the following:
(1) Current ratio,
(2) Acid- test ratio,
(3) Days’ sales uncollected,
(4) Inventory turn-over,
(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.
Round to one decimal place, except for part 6 round to twodecimals.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Fundamental accounting principle

ISBN: 978-0078025587

21st edition

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

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