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Could you do all the required? Im having a hard time with all of it.
Selected balance sheet data at the beginning of the current year: Digital Very Network Balance sheet: Accounts Receivables, net $ 41,000 $ Merchandise Inventory Total Assets 80,000 261,000 50,000 85,000 275,000 Common Stock: 10,000 $1 par (10,000 shares) $1 par (15,000 shares) 15,000 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. 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 Digital Corp. and Very Network, Inc. and have assembled the following data. E (Click to view the income statement data.) BE: (Click to view the balance sheet and market price data.) Read the requirements. Requirement 1a. Compute the acid-test ratio for both companies for the current year. i Requirements - X Begin by selecting the formula to compute the acid-test ratio. Acid-test ratio = (Cash + Short-term investments + Accounts receivable, net) - Total current liabilities Now, compute the acid-test ratio for both companies. (Round your answers to two decimal places, X.XX.) Very Network Digital 94.28 Acid-test ratio 85 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. i X Data Table Selected income statement data for the current year: Print Done Net Sales Revenue (all on credit) $ Digital Very Network 416,830 $ 496,035 211,000 257,000 Cost of Goods Sold Interest Expense 0 15,000 Net Income 50,000 74,000 Selected balance sheet and market price data at the end of the current year: Digital Very Network Current Assets: Cash $ 21,000 19,000 Short-term Investments Accounts Receivables, Net 24,000 $ 41,000 37,000 64,000 20,000 44,000 Merchandise Inventory 101,000 14,000 Prepaid Expenses $ 186,000 $ 199,000 Total Current Assets Total Assets $ 265,000 $ 326,000 Total Current Liabilities 101,000 96,000 Total Liabilities 101,000 129,000 Common Stock: 10,000 15,000 $1 par (10,000 shares) $1 par (15,000 shares) Total Stockholders' Equity Market Price per Share of Common Stock Dividends Paid per Common Share 164,000 197,000 90.00 123.25 1.10 0.90 Selected balance sheet data at the beginning of the current year: Digital Very Network Balance sheet
