Problem 13-4A Calculation of financial statement ratios LO P3 Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $50,900; total assets, $249,400; common stock, $90,000; and retained earnings, $43,304.) CABOT CORPORATION Income Statement Por Year Ended December 31, 2017 Sales $ 451,600 Cost of goods sold 298,050 Gross profit 153,550 Operating expenses 99,000 Interest expense 3,900 Income before taxes 50,650 Income taxes 20,404 Net income $ 30,246 Assets $ cash Short-term investments Accounts receivable, net Notes receivable (trade) Merchandise inventory CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity $ 22,000 Accounts payable 9,400 Accrued wages payable 29,600 Income taxes payable 5,500 34,150 Long-term note payable, secured by mortgage on plant assets 3,100 Common stock 151,300 Retained earnings $ 255,050 Total liabilities and equity 16,500 3,200 3,400 68,400 Prepaid expenses Plant assets, net Total assets 90,000 73,550 $ 255,050 These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected. (4) Inventory turnover (5) days' sales in inventory bi debt-to-equity ratio, in times interest earned. (8) profit maroin ratio. 191 total asset turnover (10) return on total assets, and in return Prepaid expenses Plant assets, net Total assets 3,100 Common stock 151,300 Retained earnings $ 255,050 Total liabilities and equity 90,000 73,550 $ 255,050 These are short-term notes receivable arising from customer (trade) sales. 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. (Do not round Intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 Req6 Req7 Req8 Req9 Req 10 Req 11 Compute the current ratio and acid-test ratio. (1) Choose Numerator: Current Ratio Choose Denominator: = Current Ratio = Current ratio 2017: to 1 Choose Numerator: Acid-Test Ratio Choose Denominator - - Acid-Test Ratio Acid-Test Ratio to 1 2017: Prepaid expenses Plant assets, net Total assets 3,100 Common stock 151,300 Retained earnings $ 255,050 Total liabilities and equity 90,000 73,550 $ 255,050 * These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventor (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio. (9) total asset turnover (10) return on total assets, and (11) retur on common stockholders' equity. (Do not round Intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Req 5 Req 6 Reg 7 Req8 Req9 Req 10 Req 10 Reg 11 Compute the days' sales uncollected. Choose Numerator: Days' Sales Uncollected Choose Denominator: x Days = Days Sales Uncollected = Days sales uncollected 2017: days Reg 1 and 2 Reg 4 > Prepaid expenses Plant assets, net Total assets 3,100 Common stock 151,300 Retained earnings $ 255,050 Total liabilities and equity 90,000 73,550 $ 255,050 * These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio. (3) days' sales uncollected, (4) Inventory turnover (5) days' sales in inventor (6) debt-to-equity ratio. (7) times interest earned, (8) profit margin ratio, (9) total asset turnover (10) return on total assets, and (11) retu on common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 Req 6 Reg 7 Req8 Req9 Req 10 Req 11 Compute the inventory turnover. Inventory Turnover Choose Denominator: Choose Numerator: = Inventory Turnover Inventory turnover times 2017: Plant assets, net Total assets 151,300 Retained earnings $ 255,050 Total liabilities and equity 73,550 $ 255,050 These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) Inventory turnover, (5) days' sales in inve (6) debt-to-equity ratio. (7) times interest earned, (8) profit margin ratio, (9) total asset turnover (10) return on total assets, and (11) ommon stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Req 4 Req 5 Req 6 Req 7 Req 8 Reg 9 Req 10 Req 11 Compute the days' sales in inventory. (5) Days' Sales In Inventory Choose Denominator: X Days Choose Numerator: - = Days' Sales In Inventory Days' sales in inventory days 2017: Prepaid expenses Plant assets, net Total assets 3,100 Common stock 151,300 Retained earnings $ 255,050 Total liabilities and equity 90,000 73,550 $ 255,050 * These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio. (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in invento (6) debt-to-equity ratio. (7) times interest earned, (8) profit margin ratio. (9) total asset turnover (10) return on total assets, and (11) retu on common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 Reg 6 Reg 7 Req8 Reg 9 Req 10 Req 11 Compute the debt-to-equity ratio. Debt-to-Equity Ratio Choose Denominator: Choose Numerator: - Debt-to-Equity Ratio Debt-to-equity ratio to 1 2017: ( Req5 Req7 > Prepaid expenses Plant assets, net Total assets 3,100 Common stock 151,300 Retained earnings $ 255,050 Total liabilities and equity 90,000 73,550 $ 255,050 These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio. (3) days' sales uncollected, (4) inventory turnover. (5) days' sales in invento (6) debt-to-equity ratio. (7) times interest earned. (8) profit margin ratio. (9) total asset turnover (10) return on total assets, and (11) retu on common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 Reg 6 Rea 7 Req8 Req9 Reg 10 Req 11 Compute the times interest earned. Times Interest Earned Choose Numerator: 1 Choose Denominator: = Times Interest Earned Times interest eamed times 2017: Plant assets, net Total assets 151,300 Retained earnings $ 255,050 Total liabilities and equity 73,550 $ 255,050 These are short-term notes receivable arising from customer (trade) sales. equired: ompute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales 5) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover (10) return on total assets, ar n common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg4 Req5 Reg6 Reg 7 Req 8 Rea 9 Reg 10 Reg 11 Compute the profit margin ratio. (8) Choose Numerator: Profit Margin Ratio 1 Choose Denominator: - Profit margin ratio = Profit margin ratio 7.1 2017: Prepaid expenses Plant assets, net Total assets 3,100 Common stock 151,300 Retained earnings $ 255,050 Total liabilities and equity 90,000 73,550 $ 255,050 These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio. (3) days' sales uncollected, (4) inventory turnover. (5) days' sales in i (6) debt-to-equity ratio. (7) times interest earned, (8) profit margin ratio, (9) total asset turnover (10) return on total assets, and on common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 Reg 6 Req 7 Req 8 Ret 9 Req 10 Req 11 Compute the total asset turnover. (9) Total Asset Turnover Choose Denominator: Choose Numerator: - Total Asset Turnover Total asset turnover 2017: times ( Req8 Reg 10 > Prepaid expenses Plant assets, net Total assets 3,100 Common stock 151,300 Retained earnings $ 255,050 Total liabilities and equity 90,000 73,550 $ 255,050 These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover (5) days' sales in i (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover (10) return on total assets, and on common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req 4 Req 4 Reg 5 Req 6 Req7 Req8 Req9 steg 10 Req 11 Compute the return on total assets. (10) Choose Numerator: Return on Total Assets Choose Denominator: = = Return on Total Assets Return on total assets 2017: Reg 11 > Plant assets, net Total assets 90,000 151,300 Retained earnings $ 255,050 Total liabilities and equity 73,550 $ 255,050 These are short-term notes receivable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover. (5) days' sales ini (6) debt-to-equity ratio. (7) times interest earned, (8) profit margin ratio, (9) total asset turnover (10) return on total assets, and on common stockholders' equity. (Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 Reg 6 Req 7 Req 8 Req 9 Req 10 Reg 11 Compute the return on common stockholders' equity. (11) Choose Numerator: 1 Return on Common Stockholders' Equity Choose Denominator = Return On Common Stockholders' Equity Return on common stockholders' equity 2017: