Prepaid Expenses Assume that you are purchasing an investment and have decided to invest in a company in the digital phone business. You have Your strategy is to invest in companies that have low pricelearnings ralios but appear to be in good shape financially. Assume that you narrowed the choice to All Digital Corp. and Green Zone, Inc. and have assembled the following dala. have analyzed all other factors and that your decision depends on the results of ralio analysis. (Click to view the income statement data) Read the requirements (Click to view the balance sheet and market price data.) Data Table Requirement 1a. Compute the acic-test ratio for both companies for the current year. Begin by selecting the fomula to compute the acid-test ratio. Selected balance sheet and market price dala at the end of the current year: Acid-test ratio All Digital Green Zone Current Assets Cash Data Table $ 23,000 $ 18,000 i Requirements Short-term Investments 37,000 17,000 Accounts Receivables, Net 39,000 49,000 Selected income statement data for the current year: Merchandise Inventory 64,000 102,000 1. Compute the following ratios for both companies for the current year: 21,000 17.000 All Digital Green Zone a. Acid-test ratio $ 203,000 184.000 $ Net Sales Revenue (all on credit) $ 417,925 S b. Inventory turnover 493. 115 Total Current Assets c. Days' sales in receivables Cost of Goods Sold 209,000 258,000 Total Assets $ 326,000 263.000 $ d. Debt ratio Interest Expense 0 14.000 e. Earnings per share of common stock Total Current Liabilities 105.000 99,000 1. Pregleamings ratio 53,000 Net Income 72,000 Total Liabilities 105.000 134,000 9. Dividend payout 2. Decide which company's stock better fits your investment strategy Common Stock: $1 par (10.000 shares) 10.000 Print Donc S2 par (14.000 shares) 28,000 Print Done Total Stockholders' Equity 158.000 192,000 Market Price per Share of Common Stock 92.80 128.50 Dividende Paid per Common Share 1.20 0.90 Selected balance sheet data at the beginning of the current year. All Digital Balance sheet Green Zone Choose from any drop-down list and then click Check