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 Best Digital, Corp. and Very Network, Inc. and have assembled the following data:

Selected income statement data for the current year:

	Best Digital	Very Network
Net Sales (all on credit)	$420,115	$494,940
Cost of Goods Sold	212,000	258,000
Interest Expense	0	17,000
Net Income	62,000	72,000

Selected balance sheet and market price data at the end of the current year:

	Best Digital	Very Network
Current Assets:
Cash	$28,000	$20,000
Short-term Investments	38,000	14,000
Accounts Receivables, Net	35,000	45,000
Merchandise Inventory	68,000	98,000
Prepaid Expenses	23,000	13,000
Total Current Assets	$192,000	$190,000
Total Assets	$263,000	$326,000
Total Current Liabilities	102,000	99,000
Total Liabilities	102,000	132,000
Common Stock, $1 par (12,000 shares)	12,000
$2 par (16,000 shares)		32,000
Total Stockholders' Equity	161,000	194,000
Market Price per Share of Common Stock	$82.72	$112.50
Dividends Paid per Common Share	$0.90	$0.60

Selected balance sheet data at the beginning of the current year:

	Best Digital	Very Network
Balance sheet:
Accounts Receivables, net	$38,000	$52,000
Merchandise Inventory	80,000	85,000
Total Assets	258,000	276,000
Common Stock, $1 par (12,000 shares)	12,000
$2 par (16,000 shares)		32,000

1.	Compute the following ratios for both companies for the current year:
	a.	Acid-test ratio
	b.	Inventory turnover
	c.	Days' sales in receivables
	d.	Debt ratio
	e.	Earnings per share of common stock
	f.	Price/earnings ratio
	g.	Dividend payout
2.	Decide which company's stock better fits your investment strategy.