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 Digitalized Corp. and Every 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.) Read the requirements. Requirement 1 A Requirements Data Table Begin by selecti Acid-test ratio Selected income statement data for the current year: Now, compute ti Every Zone Net Sales Revenue (all on credit) $ 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. Pricelearnings ratio g. Dividend payout 2. Decide which company's stock better fits your investment strategy. Digitalized 423,035 $ 210,000 Acid-test ratio Cost of Goods Sold 493,845 260,000 19,000 72,000 Requirement 11 Interest Expense Begin by selecti Net Income 51,000 financially. Assy ratio analysis. phone business. You have narrowed the choice to Digitalized Corp. and Every 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.) Selected balance sheet and market price data at the end of the current year: Read the requir Digitalized Every Zone Current Assets: Requirement 1a. Compute the acid-test ratio for both companies for the current year. Cash Begin by selecting the formula to compute the acid-test ratio. Short-term Investments Acid-test ratio = Accounts Receivables, Net 24,000 $ 40,000 40,000 66,000 23,000 17,000 14,000 48,000 97,000 12,00 188,000 Now, compute the acid-test ratio for both companies. (Round your answers to two decimal places, X.XX.) Merchandise Inventory Prepaid Expenses Digitalized Every Zone 193,000 $ Acid-test ratio Total Current Assets Total Assets 266,000 $ Requirement 1b. Compute the inventory turnover for both companies for the current year. Total Current Liabilities 105,000 105,000 323,00 96,000 128,000 Total Liabilities Begin by selecting the formula to compute the inventory turnover. Inventory turnover = assembled the following data. (Click to view the income statement data.) E: (Click to view the balance sheet and market price data.) 12,000 17,000 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 Now, compute the inventory turnover for both companies. (Round your answers to two decimal places, X.XX. 195,000 114.48 Digitalized 161,000 76.50 1.10 Every Zone 1.00 Inventory turnover Requirement 1c. Compute the days' sales in receivables for both companies for the current year. Selected balance sheet data at the beginning of the current year: Begin by selecting the formula to compute the days' sales in receivable. Digitalized Every Zone Balance sheet: Days' sales in receivables = L Accounts Receivables, net Now, compute the days' sales in receivables for both companies. (Round interim calculations to two decimal Merchandise Inventory 41,000 $ 81,000 261,000 54,000 87,000 272,000 Digitalized Every Zone Total Assets Days' sales in receivables Requirement 1d. Compute the debt ratio for both companies for the current year. Selected balance sheet data at the beginning of the current year: Begin by selecting the formula to compute the debt ratio. Digitalized Every Zone Debt ratio = | Balance sheet: Now, compute the debt ratio for both companies. (Round your answers to the one tenth of a percent, X.X%.) Accounts Receivables, net Merchandise Inventory Digitalized Every Zone % 41,000 $ 81,000 261,000 54,000 87,000 272,000 Debt ratio % Total Assets Requirement 1e. Compute the earnings per share of common stock for both companies for the current year. Common Stock: $1 par (12,000 shares) $1 par (17,000 shares) 12,000 Begin by selecting the formula to compute the earnings per share of common stock. 17,000 Earnings per share 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 Every Zone 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. Pricelearnings ratio = || Now, compute the price/earnings ratio for both companies. (Round interim and final answers to two decimal places, X.XX.) Digitalized Every Zone Pricelearnings 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%.) Every Zone Digitalized % Dividend payout Requirement 2. Decide which company's stock better fits your investments strategy