Problem 17-4A (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, $46,900; total assets, $229,400; common stock, $86,000; and retained earnings, $49,827.)

CABOT CORPORATION
Balance Sheet
December 31 of current year
Assets		Liabilities and Equity
Cash	$ 14,000	Accounts payable	$ 16,500
Short-term investments	9,400	Accrued wages payable	4,400
Accounts receivable, net	31,800	Income taxes payable	3,200
Merchandise inventory	42,150	Long-term note payable, secured by mortgage on plant assets	64,400
Prepaid expenses	2,550	Common stock	86,000
Plant assets, net	153,300	Retained earnings	78,700
Total assets	$ 253,200	Total liabilities and equity	$ 253,200

CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Sales	$ 450,600
Cost of goods sold	298,550
Gross profit	152,050
Operating expenses	99,100
Interest expense	4,600
Income before taxes	48,350
Income tax expense	19,477
Net income	$ 28,873

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 equity.