Ratto Analyslis and Reporting Problem 17-4A Calculation of flnanclal statement r

Question

Ratto Analyslis and Reporting Problem 17-4A Calculation of flnanclal statement ratlos 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, $229,400, common stock, $89.000: and retalned earnings. $30,076) Income Statement Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Incone taxes Net Income s 452,6ee 297,650 154,950 99,300 4,280 51,458 28,726 $30,724 CABOT CORPORATION Balance Sheet 31. 2817 Liabilities and Equity Assets Cash Short-term Snvestments Accounts recelvable, net. Notes receivable (trade) Nerchandi se invenitory s 16,80e Accounts payable 9,208 Acerued wages payable 32,208 Incoee Laxes payable a, see $ 18,see 4 00e 3.6ee 34, ise Leng-term nute payable, secured ty 71,488 mortgage n plant assets Prepaid expenses Plant assets, net Total assets 89.896 60.800 149.38e Retained earnings s 247,308 Tutal iabiiities and ecuity $ 247,3e These are shon-tarm notes recevabie arising from customer trade sa es

Explanation / Answer

1 Current assets / Current liabilities = Current Ratio 2017 98000 / 26100 = 3.75 2 Quick Assets / Current liabilities = Acid-test ratio 2017 63850 / 26100 = 2.45 3 Accounts Receivable x 365 / Net Sales = Days' sales uncollected 2017 32,200 x 365 / 452600 = 25.97 4 Cost of goods sold / Average Inventory = Inventory Turnover 2017 297650 / (50,900+34,150)/2 = 7.00 5 365 / Inventory turnover = Days' sales in inventory 2017 365 / 7 = 52.14 6 Total Debt / Stockholders' Equity = Debt-to-Equity Ratio 2017 97500 / 89,000+60,800 = 0.65 7 Operating Income / Interest Expense = Times Interest Earned 2017 154950 - 99,300 / 4200 = 13.25 8 Net Income / Sales = Profit Margin Ratio 2017 30724 / 452600 = 6.79% 9 Sales / Average Total Assets = Total Assets Turnover 2017 452600 / (229,400+247300)/2 = 1.90 10 Earnings before Interest and Taxes / Total Assets = Return on Total Assets 2017 30,724+20,726+4,200 / 452600 = 12.30% 11 Net Income / Average Stockholders' Equity = Return on Stockholders' Equity 2017 30724 / (119,076+149,800)/2 = 22.85%

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.