Question: 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)

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.

Compute the following: (1) current ratio, (2) acid-test ratio, (3) days sales

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 ...................... Cost of goods sold ..... Gross profit .... Operating expenses ..... Interest expense ....... Income before taxes .. Income taxes ........ Net income. $448,600 297,250 151,350 98,600 4,100 48,650 19,598 $ 29,052 CABOT CORPORATION Balance Sheet December 31, 2015 $ 17,500 3,200 3,300 Assets Cash ....... Short-term investments ...... Accounts receivable, net ...... Notes receivable (trade)* ......... Merchandise inventory . Prepaid expenses ....... Plant assets, net ........ Total assets ........... $ 10,000 8,400 29,200 4,500 32,150 2,650 153,300 $240,200 Liabilities and Equity Accounts payable .... Accrued wages payable ...... Income taxes payable ....... Long-term note payable, secured by mortgage on plant assets .... Common stock. Retained earnings ......... Total liabilities and equity ......... 63,400 90.000 62,800 $240,200

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!