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 Digitalized Corp. and Zone Network, Inc and have assembled the following data (Click to view the income statement data) 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.) Digitalized Zone Network 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 tumover Now, compute the inventory turnover for both companies. (Round your answers to two decimal places, X.XX.) Digitalized Zone Network 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) Digitalized Zone Network Days' sales in receivables Requirement 1d. Compute the debt ratio for both companies for the current year. Begin by selecting the fomula 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. XX%) Digitalized Zone Network 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.) Digitalized Zone Network Earnings per share of common stock Requirement 1f. Compute the pricelearnings ratio for both companies for the current year. Begin by selecting the formula to compute the pricelearnings ratio. Price/earnings ratio Now, compute the pricelearnings ratio for both companies. (Round interim and final answers to two decimal places, X.XX.) Digitalized Zone Network 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%.) Zone Network Digitalized % Dividend payout % Requirement 2. Decide which company's stock better fits your investments strategy. common stock seems to fit the investment strategy better. Its pricelearnings ratio is and V. On the majority of the ratios, Your strategy is to invest in companies that have low pricelearnings 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 - X X Data Table Data Table Selected Income statement data for the current year: $ Net Sales Revenue (all on credit) Cost of Goods Sold Interest Expense Net Income Digitalized Zone Network 417 925 S 497.00 208,000 259,000 0 18,000 54,000 66,000 Print Done Selected balance sheet and market price data at the end of the current year Digitalized Zone Network Current Assets Cash 5 25,000 21 000 Short-term Investments 42,000 17.000 Accounts Receivables Net 35 000 46 000 Merchandise Inventory 66,000 98.000 Prepaid Expenses 23.000 16,000 S 191.000 $ 198,000 Total Current Assets Total Assets 5 266,000 5 324 000 Total Current Liabilities 101,000 100.000 Total Liabilities 101,000 129.000 Common Stock $1 par (10,000 shares 10,000 52 par (15,000 shares) 30 000 Total Stockholders' Equity 165,000 195.000 Market Price per Share of Common Stock 75 60 101.20 Dividends Peld per Common Share 0.80 0.60 Selected balance sheet data at the beginning of the current year Digitalized Zone Network Balance sheet: Accounts Receivables, net S 40.000 3 49,000 Merchandise Inventory 82 000 87,000 Total Assets 259.000 270,000 Common Stock $1 par (10,000 shares) 10.000 52 par (15,000 shares) 30,000 Requirements 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. Dabt ratio e. Earnings per share of common stock f. Pricelearnings ratio g. Dividend payout 2. Decide which company's stock better fits your investment strategy Print Done Print Done