Assume that you are considering purchasing shares as an investment. You have narrowed the choice to two Internet firms, Video.com Inc. and On-Line Express Ltd., and have assembled the following data.

Selected income statement data for 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 that 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 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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Net sales (al on credit). Cost of goods sold.. Income from operations. Interest expense... Net income...... Video $603,000 Express $519,000 454,000 387,000 93,000 72,000 12.000 56,000 38.000 Selected balance sheet and market price data at end of current year: Current assets: Cash Short-term investments. Current receivables, net Inventories.. Prepaid expenses.. Total current assets. Total assets Video Express $ 25,000 $ 39,000 6,000 13,000 189,000 164,000 211,000 183,000 19,000 15,000 $450,000 $414,000 $974,000 5938.000