P17-4A_Cabot Corp_Ratio Analysis

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Description

Selected year end financial statements of Cabot Corp. follow. (All sales were on credit; selected balance sheet amounts at Dec. 31, 2007, were inventory, $48,900; total assets, $189,400; common stock, $90,000; and retained earnings, $22,748.)

Income statement for year ended Dec. 2008
Sales………………………$448,6…
Cost of goods sold………297,250
Gross profit……………….151,350
Operating expenses…….98,600
Interest expense…………4,100
Income taxes……………..19,598
Net income………………….$29,052

Balance Sheet Dec. 2008
Assets Liabilities and Equity
Cash……………………….$10,00… Accts. payable……………………$17,500
Short term investments…8,400 Accrued wages payable………..3,200
Accounts receivable, net..29,200 Income taxes payable…………..3,300
Notes receivable (trade)….4,500 Long term note payable, secured
Merchandise inventory…..32,150 by mortgage on plant assets….63,400
Prepaid expenses……….2,650 Common stock……………………..90,000
Plant assets, net…………153,300 Retained earnings………………….62,800
total assets………………..$240,200 Total liabilities and equity………..$240,200

Compute the following: current ratio, acid test ratio, days’ sales uncollected, inventory turnover, days’ sales in inventory, debt to equity ratio, times interest earned, profit margin ratio, total asset turnover, return on total assets, and return on common stockholder’s equity

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