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 Zone, Inc. and have assembled the following data. (Click to view the income statement data.) Your strategy is to invest in companies that have low price/earings 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. E: (Click to view the balance sheet and market price data.) Requirement 1a. 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.) Best Digital Very Zone 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.) Best Digital Very Zone 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.) Best Digital Very Zone 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%.) Best Digital % Very Zone % Debt ratio Requirement 1e. 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.) Best Digital Very Zone Earnings per share of common stock Requirement 1f. Compute the price/earnings ratio for both companies for the current year. Begin by selecting the formula to compute the price/earnings ratio. Price/earnings ratio = Now, compute the pricelearnings ratio for both companies. (Round interim and final answers to two decimal places, X.XX.) Best Digital Very Zone Price/earnings 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%.) Best Digital Very Zone Dividend payout % % Requirement 2. Decide which company's stock better fits your investments strategy. common stock seems to fit the investment strategy better. Its price/earnings ratio is On the majority of the ratios, and Choose from any list or enter any number in the input fields and then continue to the next question. - Data Table Requirements Selected balance sheet and market price data at the end of the current year: Best Digital Very Zone Current Assets: Cash $ 25,000 $ 22.000 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 Short-term Investments 37,000 17,000 35,000 46,000 Accounts Receivables, Net Merchandise Inventory 69,000 20,000 101,000 16,000 Prepaid Expenses $ 186,000 $ Total Current Assets 202,000 Total Assets $ 266,000 $ 329,000 Print Done Total Current Liabilities 102,000 96.000 Total Liabilities 102,000 131,000 Common Stock: 10,000 Data Table 34,000 $1 par (10,000 shares) $2 par (17,000 shares) Total Stockholders' Equity Market Price per Share of Common Stock Dividends Paid per Common Share 164.000 198,000 Selected income statement data for the current year: 81.20 95.70 1.10 1.00 Best Digital 421,940 $ Very Zone 496,035 $ Selected balance sheet data at the beginning of the current year: 208,000 Best Digital Very Zone Net Sales Revenue (all on credit) Cost of Goods Sold Interest Expense Net Income 259,000 19.000 0 Balance sheet: 58,000 74,000 Accounts Receivables, net S 38,000 $ 51,000 Print Done Print Done