Data Table Selected income statement data for the current year: Power Internet Net sales (all on...

  

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Data Table Selected income statement data for the current year: Power Internet Net sales (all on credit) 605,000 S 515,000 Cost of goods sold. 453,000 386,000 O Requirements - X Income from operations 90,000 68,000 Interest expense. 15,000 Net income 67,000 32,000 1. Compute the following ratios for both companies for the current year, and decide which company's stock 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-eamed ratio f. Return on common stockholders' equity g. Earnings per share of common stock h. Price-eamings ratio Print Done Data Table Selected balance sheet data at beginning of current year. Power Internet Print Done Balance sheet: Current receivables, net $ 144,000 $ 195,000 Inventories 206,000 198,000 Total assets. 844,000 912,000 Long-term debt 300,000 Preferred stock, 8%, $150 par 30,000 Common stock, $1 par (115,000 shares). ... 115,000 $5 par (10,000 shares) 50,000 Total stockholders' equity 259,000 220,000 Print Done Requirement 1. Compute the ratios for both companies for the current year and decide which company's stock better fits your investment strategy- Begin by computing the ratios, starting with the quick (acid-test) ratio (Abbreviations used Avg. = average, Cash" = cash and cash equivalents, Mkt = market, als = outstanding, SE = stockholders' equity, and ST = short-term.) %3D a. Quick (acid-test) ratio Select the formula and then enter the amounts to calculate the quick (acid-test) ratios. (Round the ratios to two decimal places, XXX) Quick ratio Power Internet b. Inventory turnover Select the formula and then enter the amounts to calculate the inventory turnover for each company (Round the ratios to two decimal places, XXX) Inventory turnover Power Internet 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 number, X Round your final answers to one decimal place, XX) = Days' sales in average recelvables Power Internet 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, X.XX.) Debt ratio Power %3D Internet e. Times-interest-earned ratio Select the formula and then enter the amounts to calculate the times-interest-earned ratio for Internet (Round the ratio to one decimal place, XX.) Times-interest-eaned ratio Internet 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 "D". Enter the ROE as a percentage rounded to the nearest one-tenth percent, X X%.) ROE Power % Intemet 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, XXX) EPS Power Internet h. 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, XXX, but then round the P/E ratios to one decimal place, X.X, as needed.) PIE ratio Power Internet Which company's stock better fits your investment strategy? The common stock of V seems to fit the investment strategy better. Its price-earnings ratio is and higher than that of Internet Company Internet Company appears to be in slilghtly better shape than Power Corporation Internet Company Power Corporation higher than that of Power Corporation Power Corporation appears to be in slightly better shape than Internet Company lower than that of Internet Company lower than that of Power Corporation Data Table Selected income statement data for the current year: Power Internet Net sales (all on credit) 605,000 S 515,000 Cost of goods sold. 453,000 386,000 O Requirements - X Income from operations 90,000 68,000 Interest expense. 15,000 Net income 67,000 32,000 1. Compute the following ratios for both companies for the current year, and decide which company's stock 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-eamed ratio f. Return on common stockholders' equity g. Earnings per share of common stock h. Price-eamings ratio Print Done Data Table Selected balance sheet data at beginning of current year. Power Internet Print Done Balance sheet: Current receivables, net $ 144,000 $ 195,000 Inventories 206,000 198,000 Total assets. 844,000 912,000 Long-term debt 300,000 Preferred stock, 8%, $150 par 30,000 Common stock, $1 par (115,000 shares). ... 115,000 $5 par (10,000 shares) 50,000 Total stockholders' equity 259,000 220,000 Print Done Requirement 1. Compute the ratios for both companies for the current year and decide which company's stock better fits your investment strategy- Begin by computing the ratios, starting with the quick (acid-test) ratio (Abbreviations used Avg. = average, Cash" = cash and cash equivalents, Mkt = market, als = outstanding, SE = stockholders' equity, and ST = short-term.) %3D a. Quick (acid-test) ratio Select the formula and then enter the amounts to calculate the quick (acid-test) ratios. (Round the ratios to two decimal places, XXX) Quick ratio Power Internet b. Inventory turnover Select the formula and then enter the amounts to calculate the inventory turnover for each company (Round the ratios to two decimal places, XXX) Inventory turnover Power Internet 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 number, X Round your final answers to one decimal place, XX) = Days' sales in average recelvables Power Internet 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, X.XX.) Debt ratio Power %3D Internet e. Times-interest-earned ratio Select the formula and then enter the amounts to calculate the times-interest-earned ratio for Internet (Round the ratio to one decimal place, XX.) Times-interest-eaned ratio Internet 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 "D". Enter the ROE as a percentage rounded to the nearest one-tenth percent, X X%.) ROE Power % Intemet 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, XXX) EPS Power Internet h. 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, XXX, but then round the P/E ratios to one decimal place, X.X, as needed.) PIE ratio Power Internet Which company's stock better fits your investment strategy? The common stock of V seems to fit the investment strategy better. Its price-earnings ratio is and higher than that of Internet Company Internet Company appears to be in slilghtly better shape than Power Corporation Internet Company Power Corporation higher than that of Power Corporation Power Corporation appears to be in slightly better shape than Internet Company lower than that of Internet Company lower than that of Power Corporation

Answer rating: 100% (QA)

Answer Solution a Quick acid test ratioCash and Cash Equivalents marketab... View the full answer