Question

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 \$55,9 ; total assets, $189,400; common stock$89,000 and retained earnings38,032 )

Check my work 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. $55,900; total assets. $189,400, common stock, $89,000, and retained earnings $38,032.) CABOT CORPORATION Income Statement For Current Year Ended December 31 Sales $ 450,600 Cont of goods sold 297. 150 Gross profit 153,450 Operating expenses 99,300 Interest expense 4,300 Income before taxes 49,850 Income tax expense 20,082 Net income $ 29,768 $ Cash Short-term investments Accounts receivable, net Merchandise inventory CAMRY CORPORATION Balance Sheet December 31 Liabilities and Equity $ 20,000 Accounts payable 9,200 Accrued wages payable 29,400 Income taxes payable 38,150 Long-term note payable, secured by mortgage on plant assets 2,550 Common stock 149.300 Retained earnings $ 248,600 Total liabilities and equity 16,500 3,800 4.100 67,400 Prepaid expenses Plant assets, net Total assets 89,000 67,800 $ 248,600 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.)

Answer 1

	Req-7	Operating income(EBIT)	/	Interest expense	=	Times interest earned ratio
		54150	/	4300	=	12.59	Times
		(49850+4300)
	Req-8	Net income	/	Net sales	=	Profit margin ratio
		29768	/	450600	=	6.61%
	Req-9	Net Sales	/	Average Assets	=	Total assets turnover
		Net Sales	/	(Total assets at beginning+Total assets at end)/2	=	Total assets turnover
		450600	/	(189400+248600)/2	=
		450600	/	219000	=	2.06	times
	Req-10	EBIT	/	Average assets	=	Return on total assets
		54150	/	219000	=	24.73%	Times
	Req-11	Net income	-	Dividend on preferred stock	/	Average common stockholder's equity	=	Return on Common stockholder's equity
		29768	-	0	/	((89000+38032)+(89000+67800))/2
		29768	-	0	/	141916	=	20.98%

*Please round of your final answers as per your requirement. since it was not mentioned in the question I've rounded off to 2 decimal points.

*If you have any doubt please let me know in the comment section. please give your valuable feedback.