Selected income statement data for the current year: $ Net Sales Revenue (all on credit) Cost of Goods Sold Interest Expense Digitalized Every Network 421,940 $ 498,955 208,000 261,000 14,000 48.000 74,000 Net Income Selected balance sheet and market price data at the end of the current year: Digitalized Every Network Current Assets: 28,000 $ 40,000 Cash Short-term Investments Accounts Receivables, Net Merchandise Inventory 15,000 16,000 48,000 40,000 64,000 18,000 Prepaid Expenses 100,000 16,000 195,000 190,000 $ Total Current Assets Total Assets 260,000 $ 102,000 325,000 96,000 Total Current Liabilities Total Liabilities 102,000 129,000 10,000 Common Stock: $1 par (10,000 shares) $2 par (16,000 shares) Total Stockholders' Equity Market Price per Share of Common Stock Dividends Paid per Common Share 158,000 76.80 32,000 196,000 125.01 1.00 1.20 Selected balance sheet data at the beginning of the current year: Digitalized Every Network Balance sheet: Accounts Receivables, net 41,000 $ 50,000 Merchandise Inventory Total Assets 81,000 259,000 85,000 279,000 Common Stock: $1 par (10,000 shares) $2 par (16,000 shares) 10,000 32,000 Assume that you are purchasing an investment and have decided to invest in a company in the digital phone business. You have narrowed the choice to Digitalized Corp. and Every Network, Inc. and have assembled the following data. (Click to view the income statement data.) Your strategy is to invest in companies that have low pricelearnings ratios but appear to be in good shape financially. Assume that you have analyzed all other factors and that your decision depends on the results of ratio analysis. Read the requirements. (Click to view the balance sheet and market price data.) Requirement la. Compute the acid-test ratio for both companies for the current year. Begin by selecting the formula to compute the acid-test ratio. Acid-test ratio = Now, compute the acid-test ratio for both companies. (Round your answers to two decimal places, X.XX.) Digitalized Every Network Acid-test ratio Requirement 1b. Compute the inventory turnover for both companies for the current year. Begin by selecting the formula to compute the inventory turnover. Inventory turnover = Now, compute the inventory turnover for both companies. (Round your answers to two decimal places, X.XX.) Digitalized Every Network Inventory turnover Requirement 1c. Compute the days' sales in receivables for both companies for the current year. Begin by selecting the formula to compute the days' sales in receivable. Days' sales in receivables = Now, compute the days' sales in receivables for both companies. (Round interim calculations to two decimal places and your final answers to the nearest whole day.) Digitalized Every Network Days' sales in receivables Requirement 1d. Compute the debt ratio for both companies for the current year. Begin by selecting the formula to compute the debt ratio. Debt ratio = Now, compute the debt ratio for both companies. (Round your answers to the one tenth of a percent, X.X%.) Digitalized % Every Network % Debt ratio Requirement le. Compute the earnings per share of common stock for both companies for the current year. Begin by selecting the formula to compute the earnings per share of common stock. Earnings per share of common stock Now, compute the earnings per share of common stock for both companies. (Round your answers to the nearest cent.) Digitalized Every Network Earnings per share of common stock Requirement 1f. Compute the pricelearnings ratio for both companies for the current year. Begin by selecting the formula to compute the pricelearnings ratio. Pricelearnings ratio = Now, compute the pricelearnings ratio for both companies. (Round interim and final answers to two decimal places, X.XX.) Digitalized Every Network Pricelearnings ratio Requirement 1g. Compute the dividend payout for both companies for the current year. Begin by selecting the formula to compute the dividend payout. Dividend payout = Now, compute the dividend payout for both companies. (Round interim answers to two decimal places, X.XX, and your final answers to the nearest whole percent, X%.) Digitalized % Every Network % Dividend payout Requirement 2. Decide which company's stock better fits your investments strategy. common stock seems to fit the investment strategy better. Its pricelearnings ratio is and 7. On the majority of the ratios, Choose from any list or enter any number in the input fields and then continue to the next question. have for Later