Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2014, 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, 2015
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

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.
Round to one decimal place; for part 6, round to two decimals.

Transcribed Image Text:

CABOT CORPORATION Balance Sheet December 31,2015 Assets Cash Short-term Investments Accounts recelvable, net Notes recelvable (trade)* Merchandise Inventory Prepald expenses Plant assets, net Total assets Liabilities and Equity $ 10,000 Accounts payable . 17,500 3,200 3,300 8,400 29,200 4,500 32,150 Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets 2,650 Common stock 153,300 Retalned earnings 63,400 90,000 62,800 $240,200 $240,200 Total Ilabilitie s and equity These are short-term notes receivable arising from customer (trade) sales.