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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. (Do not round intermediate calculations.) Required: Complete this question by entering your answers in the tabs below. Req 5 Req 7 Req 8 Req 9 Req 10 Reg 11 Req 1 and 2 Req 3 Req 4 Reg 6 Compute the current ratio and acid-test ratio. Current Ratio (1) Choose Denominator: Current Ratio Choose Numerator: Current liabilities Current ratio %3D Current assets 0 to 1 %3D Acid-Test Ratio (2) Acid-Test Ratio %3D Choose Numerator: Choose Denominator: Acid-Test Ratio %3D 0 to 1 %3D

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.) Required: Complete this question by entering your answers in the tabs below. Req 5 Req 7 Req 8 Req 9 Req 10 Reg 11 Req 1 and 2 Req 3 Req 4 Reg 6 Compute the current ratio and acid-test ratio. Current Ratio (1) Choose Denominator: Current Ratio Choose Numerator: Current liabilities Current ratio %3D Current assets 0 to 1 %3D Acid-Test Ratio (2) Acid-Test Ratio %3D Choose Numerator: Choose Denominator: Acid-Test Ratio %3D 0 to 1 %3D

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.23E: Unusual income statement items Assume that the amount of each of the following items is material to...
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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.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the current ratio and acid-test ratio. (1) Current Ratio Choose Numerator: Choose Denominator: Current Ratio %3D Current assets Current liabilities Current ratio %3D 0 to 1 %3D (2) Acid-Test Ratio Choose Numerator: Choose Denominator: Acid-Test Ratio %3D Acid-Test Ratio %3D 0 to 1 Req 1 and 2 Req 3 > II
Transcribed Image Text: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.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the current ratio and acid-test ratio. (1) Current Ratio Choose Numerator: Choose Denominator: Current Ratio %3D Current assets Current liabilities Current ratio %3D 0 to 1 %3D (2) Acid-Test Ratio Choose Numerator: Choose Denominator: Acid-Test Ratio %3D Acid-Test Ratio %3D 0 to 1 Req 1 and 2 Req 3 > II
CABOT CORPORATION Income Statement For Current Year Ended December 31 $ 449,600 297,750 151,850 99,300 4,400 48,150 19,397 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income 28,753 CABOT CORPORATION Balance Sheet December 31 Assets Liabilities and Equity Cash 14,000 Accounts payable 8,600 30,600 $ $ 16,500 3,600 2,900 67,400 Short-term investments Accounts receivable, net Merchandise inventory Accrued wages payable Income taxes payable 32,150 Long-term note payable, secured by Prepaid expenses Plant assets, net 2,550 152,300 $ 240,200 mortgage on plant assets Common stock 84,000 65,800 $ 240,200 Retained earnings Total assets Total liabilities and equity 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.)
Transcribed Image Text:CABOT CORPORATION Income Statement For Current Year Ended December 31 $ 449,600 297,750 151,850 99,300 4,400 48,150 19,397 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income tax expense Net income 28,753 CABOT CORPORATION Balance Sheet December 31 Assets Liabilities and Equity Cash 14,000 Accounts payable 8,600 30,600 $ $ 16,500 3,600 2,900 67,400 Short-term investments Accounts receivable, net Merchandise inventory Accrued wages payable Income taxes payable 32,150 Long-term note payable, secured by Prepaid expenses Plant assets, net 2,550 152,300 $ 240,200 mortgage on plant assets Common stock 84,000 65,800 $ 240,200 Retained earnings Total assets Total liabilities and equity 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.)
Expert Solution
Step 1 Introduction

The current ratio is calculated as ratio of current assets and current liabilities.

The acid test ratio is calculated as ratio of quick assets and current liabilities. 

 

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