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Data Table - X Data Table Selected income statement data for the current year: Selected balance sheet and market price data at end of current year: Authority Browse Net sales .(all on credit) . 610,000 5 516,000 Authority Browse Cost. of goods sold 457,000 390,000 Current assets: Income from operations. 94,000 79,000 Cash 22,000 S 41,000 Interest expense . . 10,000 Short-term investments 2,000 13,000 Net income. 64,000 35,000 Current receivables, net 188,000 166,000 Inventories 208,000 184,000 - X Prepaid expenses 19,000 17,000 Data Table Total current assets 439,000 421,000 Total assets 972,000 934,000 Selected balance sheet data at beginning of current year. Total current liabilities 370,000 342,000 Total liabilities 673,000 695,000 Authority Browse Preferred stock, 8%, $150 par 30,000 Balance sheet: Common stock, $1 par Current receivables, net $ 146,000 $ 195,000 (115,000 shares) 115,000 Inventories. 211,000 196,000 $5 par (10,000 shares) 50,000 Total assets 850,000 907,000 Total stockholders' equity 299,000 239,000 Long-term debt 291,000 Preferred stock, 8%, $150 par 30,000 Market price per share of common stock 5.60 5 71.72 Common stock, $1 par (115,000 shares) 115,000 Requirements - X $5 par (10,000 shares 50,000 Total stockholders' equity . . . . . 260,000 216,000 1. Compute the following ratios for both companies for the current year, and decide which company's stock Print Done better fits 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 common stockholders' equity g. Earnings per share of common stock h. Price-earnings ratioAssume that you are considering purchasing stock as an investment. You have narrowed the choice to either Authority Corporation stock or Browse Company stock and have assembled the tollowing data tor the two companies. .(ClIck the Icon to view the income statement data.) a (Click the icon to View data at end of current year.) a (Click the Icon to view data at beginning ot current year.) Your strategy is to invest in companies that have low price-eamings ratios but appear to be in good shape nancially. Assume that you have analyzed all other fadors and that yourdecision depends on the results of ratio analysis. Read the @uirements Requirement 1. Compute the ratios for both companies for the current year and decide which company's stock better ts your investment strategy. Begin by computing the ratios, starting with the quick (acidrtest) ratio (Abbreviations used: Avg. = average, Cash' = cash and cash equivalents, Mk'l = market, ols = outstanding, SE = stockholders' equity, and ST = shorleterrn.) a. Quick (acidetest) ratio Select the formula and then enter the amounts to calculate the quick (301171851) ratios. (Round the ratios to two deCImal places, X )0( ) ( + + )l = Quick ratio Authority ( + + ) i = Browse ( + + ) i = [1. Inventory turnover Select the formula and then enter the amounts to calculate the Inventory turnover tor each company. (Round the ratios to two decimal places, X XX.) I = Inventory turnover Authority i = Browse i = c. Days' sales in average receivables Select the formula and then enter the amounts to calculate days' sales in average receivables for each company. (Use a 365-day year Round intermediary calculations to the nearest whole numbel f = Days' sales in average receivables Authority 1' : Browse I : d. Debt ratio Select the formula and then enter the amounts to calculate the debt ratio for each company. (Enter the debt ratio in decimal form to two decimal places, XXX.) f = Debt ratio Authority 1' : Browse I : e. Times-interest-earned ratio Select the formula and then enter the amounts to calculate the times-interest-earned ratio for Browse. (Round the ratio to one decimal place, X.X.) Times-interest-earned ratio Browse f. Return on common stockholders' equity Select the formula and then enter the amounts to calculate the return on common stockholders' equity (ROE) for each company. (Complete all answer boxes. If an account has a zero balance, enter a "0". Enter the ROE as ROE Authority Browse g. Earnings per share of common stock Select the formula and then enter the amounts to calculate earnings per share (EPS) for each company. (Complete all answer boxes. If an account has a zero balance, enter a "0". Round EPS to two decimal places, X.XX. EPS Authority Browseh. Price-earnings ratio Select the formula and then enter the amounts to calculate the price-earnings (P/E) ratio for each company. (Enter amounts in the formula to two decimal places, X.XX, but then round the P/E ratios to one decimal place, X.X, as needed.) P/E ratio Authority Browse Which company's stock better fits your investment strategy? The common stock of seems to fit the investment strategy better. Its price-earnings ratio is anda. Quick (acid-test) ratio Select the formula and then enter the amounts to calcul + Authority Browse Avg common equity Average daily sales b. Inventory tu Average inventory Select the form Average receivables ounts to calcul Capital charge Cash* Authority Common shares ofs Browse Cost of capital c. Days' sales Cost of goods sold Current assets Select the for Current liabilities ounts to calcul Current receivables Authority Interest expense Inventories Browse Long-term debt d. Debt ratio Mkt price per share Select the form Net income Net sales ounts to calcul ST investments Total assets Choose from Total liabilities er in the inpu Total SEb. Inventory turnover Select the formula and then enter the amou Authority Browse Average common equity Average daily sales c. Days' sales Average inventory Select the fon Average receivables Capital charge Cash Authority Common shares ofs Browse Cost of capital d. Debt ratio Cost of goods sold Current assets Select the for Current liabilities Current receivables Authority Income from operations Interest expense Browse Inventories e. Times-inter Long-term debt Select the for Market price per share Net income Net sales Browse Short-term investments Total assets f. Return on c Total liabilities Total stockholders' equityc. Days sales in average receivables Select the formula and then enter the amounts to ca Authority Browse Average common equity Average daily sales d. Debt ratio Average inventory Select the formul Average receivables Capital charge Cash Authority Common shares o/s Browse Cost of capital e. Times-interest Cost of goods sold Current assets Select the formul Current liabilities Current receivables Browse Income from operations Interest expense f. Return on com Inventories Select the formu Long-term debt D CE Market price per share Net income Authority Net sales Browse Short-term investments Total assets g. Earnings per s Total liabilities Calast the fam Total stockholders' equityd. Debt ratio Select the formula and then enter the amounts to ca Authority Browse Average common equity e. Times-intere: Average daily sales Average inventory Select the form Average receivables to ca Capital charge Cash Browse Common shares o/s f. Return on cor Cost of capital Select the form Cost of goods sold Current assets to ca Current liabilities Authority Current receivables Browse Income from operations Interest expense g. Earnings per Inventories Select the form Long-term debt to ca Market price per share Net income Authority Net sales Browse Short-term investments Total assets h. Price-earning Total liabilities Total stockholders' equitye. Times-interest-earned ratio Select the formula and then enter the amounts Browse f. Return on C Average common equity Average daily sales Select the forr Average inventory S Average receivables Authority Capital charge Cash Browse Common shares ofs g. Earnings pe Cost of capital Select the forr Cost of goods sold Current assets S Current liabilities Authority Current receivables Browse Income from operations Interest expense h. Price-earnit Inventories Select the forr Long-term debt S Market price per share Net income Authority Net sales Browse Short-term investments Total assets Which compai Total liabilities Total stockholders' equityf. Return on common stockholders' equity Select the formula and then enter the amounts to Authority ( Average common equity Browse Average inventory Average receivables g. Earnings per s Capital charge Select the formul: Cash Common shares ofs Cost of capital Authority Cost of goods sold Browse Current assets h. Price-earnings Current liabilities Current receivables Select the formuli Income from operations Interest expense Authority Inventories Long-term debt Browse Market price per share Which company's Net income Net sales The common sto Preferred dividends Short-term investments Choose from any Total assets Total liabilities Total stockholders' equity(Click the ic it (Click the ic Average common equity CI Your strategy is Average inventory e Read the requir Average receivables Capital charge Cash Authority Common shares o/s Cost of capital Browse Cost of goods sold e. Times-interes Current assets Current liabilities Select the form Current receivables to Income from operations Browse Interest expense Inventories f. Return on cor Long-term debt Select the form Market price per share to Net income Net sales Authority Preferred dividends Browse Short-term investments g. Earnings per Total assets Total liabilities Select the form Total stockholders' equity to Authority Browse(Click the ic urrent Your strategy is Average common equity low p Read the require Average daily sales Average inventory Select the formu Average receivables calcu Capital charge Cash Browse Common shares o/s f. Return on con Cost of capital Select the formu Cost of goods sold calcu Current assets ( Current liabilities Authority ( Current receivables Browse Earnings per share Interest expense g. Earnings per Inventories Select the formu Long-term debt calcu Market price per share Net income Authority Net sales Browse Short-term investments h. Price-earning Total assets Total liabilities Select the formu Total stockholders' equity calcu Authority