Assume that you are purchasing an investment and have decided to invest in a company in the publishing business. You have narrowed the choice to Thrifty Nickel Corp. and The Village Cryer Limited and have assembled the following data.

Selected income statement data for the current year:

Selected balance sheet data at beginning of the current year:

Selected balance sheet and market price data at end of the current year:

Your strategy is to invest in companies that have low price/earnings ratios but appear to be in good shape financially. Assume that you have analyzed all other factors and your decision depends on the results of ratio analysis.
Requirement
Compute the following ratios for both companies for the current year, and decide which company's shares better fit your investment strategy:
a. Quick (acid-test) ratio
b. Inventory turnover
c. Days' sales in average receivables
d. Debt ratio
e. Times-interest-earned ratio
f. Return on equity
g. Earnings per share
h. Price/earnings ratio?

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Thrifty Nick 5371,000 209,000 79,000 Village Cryer Nsll on ne) Cost of goods sold Income from o Interest expense. $497,000 258,000 138,000 19,000 72,000 48,000 Thrifty Nickel $ 40,000 93,000 259,000 Village Cryer Current receivables, net Inventories Total assets Long-term debt Preferred shares: $5.00 (200 shares) issued Common shares: (10,000 shares) 48,000 88,000 270,000 86,000 20,000 10,000 (5,000 shares) 12,500 126,000 Total shareholders' equity 118,000 Thrifty Nickel Village Cryer Current assets: $ 19,000 18,000 46,000 100,000 3,000 $186,000 328,000 98,000 Cash $ 22,000 20,000 42,000 87,000 2,000 $ 173,000 265,000 108,000 hort-term investments Current receivables, net Inventori Prepaid expenses lotal current assets Total assets Total current liabilities Total liabilities Preferred shares: $5.00 (200 shares) Common shares: (10,000 shares) 108,000* 131,000* 20,000 10,000 (5,000 shares) 12,500 197,000 $ 112 Total shareholders' equity 157,000 51 Market price per share of common share Includes long-term debt: Thrifty Nickel, S-0-; and Village Cryer, $86,000