Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $48,900; total assets, $199,400; common stock, $115,000; and retained earnings, $52,348.)
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CABOT CORPORATION
Income Statement
For Year Ended December 31, 2013
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Sales
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$
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447,600
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Cost of goods sold
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297,950
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Gross profit
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149,650
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Operating expenses
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98,600
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Interest expense
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4,800
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Income before taxes
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46,250
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Income taxes
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18,631
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Net income
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$
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27,619
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CABOT CORPORATION
Balance Sheet
December 31, 2013
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Assets
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Liabilities and Equity
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Cash
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$
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18,000
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Accounts payable
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$
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26,500
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Short-term investments
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9,000
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Accrued wages payable
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3,400
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Accounts receivable, net
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31,200
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Income taxes payable
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4,500
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Notes receivable (trade)*
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6,500
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Long-term note payable, secured
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Merchandise inventory
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40,150
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by mortgage on plant assets
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62,400
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Prepaid expenses
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3,000
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Common stock
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115,000
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Plant assets, net
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153,300
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Retained earnings
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49,350
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Total assets
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$
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261,150
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Total liabilities and equity
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$
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261,150
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* These are short-term notes receivable arising from customer (trade) sales.
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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.
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