Assume that you are considering purchasing stock as an investment. You have narrowed the choice to either Superiority Corporation stock or U-shop Company stock and have assembled the following data for the two companies. (Click the icon to view the income statement data.) Click the icon to view data at end of current year.) (Click the icon to view data at beginning of 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. Read the requirements 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, ols = outstanding, SE = stockholders' equity, and ST = short-term.) 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, X.XX.) + + ) Quick ratio + + ) = Superiority U-shop + ) b. Inventory turnover Select the formula and then enter the amounts to calculate the inventory tumover for each company. (Round the ratios to two decimal places, X.XX.) inventory turnover . = Superiority U-shop 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 receivables Superiority U-shop = . 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 = Superiority U-shop - e e. Times-interest-earned ratio Select the formula and then enter the amounts to calculate the times-interest-earned ratio for U-shop (Round the ratio to one decimal place. X.X.) Times-interest-eared ratio Assume that you are considering purchasing stock as an investment. You have narrowed the choice to either Superiority Corporation stock or U-shop Company stock and have assembled the following data for the two companies. (Click the icon to view the income statement data.) Click the icon to view data at end of current year.) (Click the icon to view data at beginning of 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. Read the requirements 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 Superiority U-shop = e. Times-interest-earned ratio Select the formula and then enter the amounts to calculate the times-interest-earned ratio for U-shop. (Round the ratio to one decimal place, XX.) . Times-interest-eamed ratio U-shop - 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 a percentage rounded to the nearest one-tenth percent, X.X%.) ) ROE % Superiority U-shop ) % 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 ) Superiority U-shop ( ) 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, X.XX, but then round the P/E ratios to one decimal place, XX, as needed.) P/E ratio Superiority U-shop 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 V, and - 1 Requirements Data table U-shop 41,000 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-earned ratio f. Return on common stockholders' equity g. Earnings per share of common stock h. Price-earnings ratio 13,000 166,000 182,000 14,000 Selected balance sheet and market price data at end of current year: Superiority Current assets Cash 5 26.000 $ Short-term investments 6,000 Current receivables, net 185.000 Inventories 209,000 Prepaid expenses 15.000 Total current assets 441.000 Total assets 984,000 Total current liabilities 384.000 Total liabilities 669.000 Preferred stock, 10%, $100 par Common stock, 51 par (100,000 shares) 100,000 $5 par (15,000 shares) Total stockholders' equity 315.000 Market price per share of common stock $ 8.00 $ 416,000 Print Done 932,000 340.000 890,000 20.000 75,000 Data table 242,000 51.87 Selected balance sheet data at beginning of current year: Superiority U-shop Data table Balance sheet: Current receivables, net S 149,000 $ Selected income statement data for the current year: Inventories 204,000 Total assets 841,000 194,000 196.000 914,000 307.000 20,000 Superiority U-shop 5 805.000 $ 527,000 Net sales (all on credit) Cost of goods sold Income from operations 458.000 Long-term debt Preferred stock, 10%, $100 par Common stock, 51 par (100,000 shares) $5 par (15,000 shares) Total stockholders' equity 385.000 100,000 90.000 70.000 75,000 Interest expense 15.000 268,000 220,000 Net income 82.000 39.000 Print Done Print Done