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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, $51,900; total assets, $249,400; common stock, $81,000; and retained earnings, $36,386.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 18,000 8,400 Operating expenses Interest expense Income before taxes Income tax expense Net income CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 448,600 Cost of goods sold Gross profit 30,400 Income taxes payable 34,150 Long-term note payable, secured by mortgage on plant assets 2,750 Common stock 150,300 Retained earnings $ 244,000 Total liabilities and equity 297,950 150,650 98,700 4,200 47,750 19,236 $ 28,514 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable Accrued wages payable on equity. Note: Do not round intermediate calculations. $ 18,500 4,000 3,200 72,400 81,000 64,900 $ 244,000 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

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, $51,900; total assets, $249,400; common stock, $81,000; and retained earnings, $36,386.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 18,000 8,400 Operating expenses Interest expense Income before taxes Income tax expense Net income CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 448,600 Cost of goods sold Gross profit 30,400 Income taxes payable 34,150 Long-term note payable, secured by mortgage on plant assets 2,750 Common stock 150,300 Retained earnings $ 244,000 Total liabilities and equity 297,950 150,650 98,700 4,200 47,750 19,236 $ 28,514 CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Accounts payable Accrued wages payable on equity. Note: Do not round intermediate calculations. $ 18,500 4,000 3,200 72,400 81,000 64,900 $ 244,000 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

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 52E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...
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Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Compute the total asset turnover. (9) Req 1 and 2 (10) Numerator: Req 1 and 2 Req 3 Compute the return on total assets. (11) Req 4 Numerator: Complete this question by entering your answers in the tabs below. Req 3 Req 4 Numerator: Compute the return on equity. Req 4 1 1 1 / / Req 5 1 1 1 Total Asset Turnover Req 6 Req 5 Denominator: Req 5 Req 6 Return on Total Assets Denominator: < Req 9 Req 11 > Complete this question by entering your answers in the tabs below. Req 6 Req 7 Denominator < Req 7 Req 10 = Req 7 = Return on Equity Req 8 Total Asset Turnover Total asset turnover 0 times Req 8 Req 8 = = Req 9 Return on Total Assets Return on total assets Req 11 Req 9 Req 9 Req 10 Req 10 0% Req 10 Return On Equity Return on equity Req 11 Req 11 Req 11 0%
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Compute the total asset turnover. (9) Req 1 and 2 (10) Numerator: Req 1 and 2 Req 3 Compute the return on total assets. (11) Req 4 Numerator: Complete this question by entering your answers in the tabs below. Req 3 Req 4 Numerator: Compute the return on equity. Req 4 1 1 1 / / Req 5 1 1 1 Total Asset Turnover Req 6 Req 5 Denominator: Req 5 Req 6 Return on Total Assets Denominator: < Req 9 Req 11 > Complete this question by entering your answers in the tabs below. Req 6 Req 7 Denominator < Req 7 Req 10 = Req 7 = Return on Equity Req 8 Total Asset Turnover Total asset turnover 0 times Req 8 Req 8 = = Req 9 Return on Total Assets Return on total assets Req 11 Req 9 Req 9 Req 10 Req 10 0% Req 10 Return On Equity Return on equity Req 11 Req 11 Req 11 0%
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, $51,900; total assets, $249,400; common stock, $81,000; and retained earnings, $36,386.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION Income Statement. For Current Year Ended December 31 Sales $ 448,600 297,950 150, 650 98,700 4,200 47,750 19,236 $ 28,514 Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income Req 1 and 2 Req 3 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. Note: Do not round intermediate calculations. Complete this question by entering your answers in the tabs below. Req 4 Compute the days' sales uncollected. (3) $ 18,000 8,400 30,400 34,150 2,750 150,300 Retained earnings. $ 244,000 Total liabilities and equity CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Numerator: Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock Req 5 Req 6 Days' Sales Uncollected 1 Denominator: 1 Req 7 1 < Req 1 and 2 Req 8 X X X Req 9 Days Req 4 > = = Req 10 Req 11 Days Sales Uncollected Days sales uncollected $ 18,500 4,000 3,200 72,400 81,000 64,900 $ 244,000 0 days Compute the inventory turnover. (4) Compute the days' sales in inventory. (5) (6) Req 1 and 2 Numerator: Compute the debt-to-equity ratio. (7) Numerator: (8) Numerator: Req 3 Compute the times interest earned. Req 4 Numerator: + Compute the profit margin ratio. Numerator: 1 1 1 Req 5 1 1 1 1 1 1 1 1 1 Inventory Turnover Denominator: Days' Sales in Inventory Denominator: Debt-to-Equity Ratio Req 6 Denominator: Times Interest Earned 1 Req 7 1 <Rea 6 < Req 7 X Profit Margin Ratio Denominator: X X Req 8 Denominator: = = = Days = = Req 9 Rea 8 = = = = = = Inventory Turnover Inventory turnover 0 times Days' Sales in Inventory Days' sales in inventory 0 days Debt-to-Equity Ratio Debt-to-equity ratio 0 to 1 Req 10 Req 11 Times Interest Earned Times interest earned Req 9 > 0 times Profit margin ratio Profit margin ratio %
Transcribed Image Text: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, $51,900; total assets, $249,400; common stock, $81,000; and retained earnings, $36,386.) Assets Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets CABOT CORPORATION Income Statement. For Current Year Ended December 31 Sales $ 448,600 297,950 150, 650 98,700 4,200 47,750 19,236 $ 28,514 Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income Req 1 and 2 Req 3 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. Note: Do not round intermediate calculations. Complete this question by entering your answers in the tabs below. Req 4 Compute the days' sales uncollected. (3) $ 18,000 8,400 30,400 34,150 2,750 150,300 Retained earnings. $ 244,000 Total liabilities and equity CABOT CORPORATION Balance Sheet December 31 of current year Liabilities and Equity Numerator: Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant assets Common stock Req 5 Req 6 Days' Sales Uncollected 1 Denominator: 1 Req 7 1 < Req 1 and 2 Req 8 X X X Req 9 Days Req 4 > = = Req 10 Req 11 Days Sales Uncollected Days sales uncollected $ 18,500 4,000 3,200 72,400 81,000 64,900 $ 244,000 0 days Compute the inventory turnover. (4) Compute the days' sales in inventory. (5) (6) Req 1 and 2 Numerator: Compute the debt-to-equity ratio. (7) Numerator: (8) Numerator: Req 3 Compute the times interest earned. Req 4 Numerator: + Compute the profit margin ratio. Numerator: 1 1 1 Req 5 1 1 1 1 1 1 1 1 1 Inventory Turnover Denominator: Days' Sales in Inventory Denominator: Debt-to-Equity Ratio Req 6 Denominator: Times Interest Earned 1 Req 7 1 <Rea 6 < Req 7 X Profit Margin Ratio Denominator: X X Req 8 Denominator: = = = Days = = Req 9 Rea 8 = = = = = = Inventory Turnover Inventory turnover 0 times Days' Sales in Inventory Days' sales in inventory 0 days Debt-to-Equity Ratio Debt-to-equity ratio 0 to 1 Req 10 Req 11 Times Interest Earned Times interest earned Req 9 > 0 times Profit margin ratio Profit margin ratio %
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