Assume that you are considering purchasing stock as an investment. You have narrowed the choice to either Verge Corporation stock or Express 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.) E (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. R - X stock better fits your investment strategy. Requirements Cash* = cash and cash equivalents, Mkt = market, o/s = outstanding, SE = stockholders' equity, and ST = short-term.) a. S# two decimal places, XXX.) = Quick ratio 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 Print Done - X computing the ratios, starting with the quick (acid-test) ratio. (Abbreviations used: Avg. = average, Cash* = cash and cash equivalents, Mkt = market, o/s = outstanding, SE = stockholders' equity, and ST = short- (acid-test) ratio Data Table mal places, X.XX.) - X Selected balance sheet and market price data at end of current year: Quick ratio Data Table Verge Express Data Table Current assets Selected balance sheet data at beginning of current year: Cash $ 26,000 $ 39,000 Short-term investments 10,000 14,000 Verge Express Selected income statement data for the current year: Balance sheet: 187,000 Verge Current receivables, net Inventories $ 163,000 187,000 6,000 148.000 $ 197,000 210,000 11,000 $ Express 515,000 385,000 598,000 $ 213,000 849,000 457.000 198,000 905,000 308,000 Prepaid expenses Total current assets 444,000 Net sales (all on credit) Cost of goods sold Income from operations Interest expense Net income 91,000 79,000 Current receivables, net Inventories Total assets Long-term debt Preferred stock, 8%, $150 par Common stock, $1 par (115,000 shares) $5 par (10,000 shares) Total stockholders' equity Total assets 409,000 926,000 331,000 16.000 30,000 983,000 370,000 668,000 70,000 Total current liabilities Total liabilities 40,000 115,000 700,000 50,000 Preferred stock, 8%, $150 par 30,000 262,000 217,000 115,000 Print Done Common stock, $1 par (115,000 shares) $5 par (10,000 shares) Total stockholders' equity 50,000 315 non 226.000