10 7 points Problem 13-4A (Algo) Calculating financial statement ratios LO P3 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, $48,900; total assets, $189,400; common stock, $82,000; and retained earnings, $40,529.) CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable 9,400 Accrued wages payable 30,600 Income taxes payable 38,150 Long-term note payable, secured by mortgage on plant assets 2,800 149,300 Common stock Retained earnings $ 244,250 Total liabilities and equity eBook Print Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net $ 14,000 References o Total assets $ 18,500 3,600 3,900 64,400 82,000 71,850 $ 244,250 CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income Required: $ 453,600 297,150 156,450 99,200 4,800 52,450 21,129 $ 31,321 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 equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Complete this question by entering your answers in the tabs below. Print Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 References Compute the current ratio and acid-test ratio. (1) (2) Numerator: Current assets Current Ratio Denominator: Current liabilities = Current Ratio = Current ratio = 0 to 1 Acid-Test Ratio Numerator: Denominator: = Acid-Test Ratio Current liabilities Acid-Test Ratio = 0 to 1 Quick assets eferences Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the days' sales uncollected. (3) Days' Sales Uncollected Numerator: Denominator: Days 1 < Req 1 and 2 Req 4 > = = Days Sales Uncollected Days sales uncollected 0 days References Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Reg 9 Req 10 Req 11 Compute the inventory turnover. (4) Numerator: Inventory Turnover Denominator: = Inventory Turnover = Inventory turnover = 0 times < Req 3 Req 5 > nces Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Reg 7 Req 8 Req 9 Req 10 Req 11 Compute the days' sales in inventory. (5) Days' Sales in Inventory Numerator: 1 Denominator: Days = Days' Sales in Inventory 1 = 1 = Days' sales in inventory 0 days < Req 4 Req 6 > nces Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Reg 7 Req 8 Req 9 Req 10 Req 11 Compute the debt-to-equity ratio. (6) Numerator: 1 1 Debt-to-Equity Ratio Denominator: = Debt-to-Equity Ratio = Debt-to-equity ratio = < Req 5 Req 7 > 0 to 1 Req 1 and 2 Req 3 Req 4 Req 5 7 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the times interest earned. (7) Numerator: + + Times Interest Earned Denominator: = Times Interest Earned = = Times interest earned 0 times < Req 6 Req 8 > Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Reg 7 Req 8 Req 9 Req 10 Req 11 Compute the profit margin ratio. (8) Profit Margin Ratio Numerator: 1 1 Denominator: = Profit margin ratio = Profit margin ratio 0% < Req 7 Req 9 > Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the total asset turnover. (9) Numerator: 1 1 Total Asset Turnover Denominator: = Total Asset Turnover = Total asset turnover = 0 times < Req 8 Req 10 > ces Req 1 and 2 Req 3 Reg 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the return on total assets. (10) Numerator: Return on Total Assets Denominator: = Return on Total Assets = Return on total assets = 0% < Req 9 Req 11 > Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Reg 9 Req 10 Req 11 Compute the return on equity. (11) Numerator: Return on Equity Denominator < Req 10 = Return On Equity = Return on equity = 0% Req 11 >