Data Table Selected balance sheet and market price data at the end of the current year: All Digital Green Zone Current Assets: Cash $ 23,000 $ 18,000 Short-term Investments 37,000 17,000 Accounts Receivables, Net 39,000 49,000 Merchandise Inventory 102,000 64,000 21,000 17,000 Prepaid Expenses $ 184,000 $ 203,000 Total Current Assets Total Assets $ 263,000 $ 326,000 Total Current Liabilities 105,000 99,000 Total Liabilities 105,000 134,000 Common Stock: 10,000 $1 par (10,000 shares) $2 par (14,000 shares) Total Stockholders' Equity 28,000 158,000 192,000 Market Price per Share of Common Stock 92.80 128.50 Dividends Paid per Common Share 1.20 0.90 Selected balance sheet data at the beginning of the current year: All Digital Green Zone Print Done Data Table Selected income statement data for the current year: All Digital Green Zone $ 417,925 $ 493,115 209,000 258,000 Net Sales Revenue (all on credit) Cost of Goods Sold Interest Expense Net Income 0 14,000 58,000 72,000 Print Done - X Requirements a. 1. Compute the following ratios for both companies for the current year: Acid-test ratio b. Inventory turnover C. Days' sales in receivables d. Debt 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 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 All Digital Corp. and Green Zone, Inc. and have assembled the following data. (Click to view the income statement data.) (Click to view the balance sheet and market price data.) 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 Requirement la 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.) All Digital Green 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.) All Digital Green 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.) Choose from any list or enter any number in the input fields and then continue to the next
