P17-284 Using ratios to decide between two stock investments Assume that you are purchasing an investment and have decided to invest in a com- pany in the digital phone business. You have narrowed the choice to Digitalized Corp. and Every Zonc, Inc. and have assembled the following data. Selected income statement data for the current year: Net Sales Revenue (all on credit) Cost of Goods Sold Interest Expense Net Income Digitalized $423,035 210,000 0 51,000 Every Zone $493,845 260,000 19,000 72,000 Selected balance sheet and market price data at the end of the current year. Digitalized Every Zone Current Assets: Cash Short-term Investments Accounts Receivable, Net Merchandise Inventory Prepaid Expenses Total Current Assets $ 24,000 40,000 40,000 66,000 23,000 $ 193,000 $ 266,000 105,000 105,000 $ 17,000 14,000 48,000 97,000 12,000 $ 188,000 $323,000 96,000 128,000 Total Assets Total Current Liabilities Total Liabilities Common Stock: $1 par (12,000 shares) $1 par (17,000 shares) Total Stockholders' Equity Market Price per Share of Common Stock Dividends Paid per Common Share 12,000 161,000 76.50 1.10 17,000 195,000 114.48 1.00 Selected balance sheet data at the beginning of the current year Digitalized Every Zone Balance Sheet: Accounts Receivable.net Merchandise inventory Total Assets Common Stock: $1 par (12,000 shares) $1 par (17,000 shares) $ 41,000 81,000 261,000 $ 54,000 87,000 272,000 12,000 17,000 for both companies for the current year: e. Earnings per share of common stock f. Price/earnings ratio g. Dividend payout better fits your investment strategy. Requirement1 1 Diotaled Corp Every Zone, in la 1 1 b 1 1 1 C. Page 1 d 1 T + 1 e 1 Requirement 2 1 1 1 1 E17-14 E17.15 E17-10 E17.18 E12-17 E17-10 E17-20 E17:21 P E17-12 P17-24 P17-23A Ready Page: 1 of 4