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 Very 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. Data Table - X Selected income statement data for the current year. $ Net Sales Revenue (all on credit) Cost of Goods Sold Interest Expense Net Income Digitalized 416,100 $ 212,000 0 56,000 Very Zone 496,035 261,000 16,000 76,000 Print Done Data Table X Selected balance sheet and market price data at the end of the current year: Digitalized Very Zone Current Assets Cash $ 27,000 $ 16,000 Short-term Investments 37,000 15,000 Accounts Receivables, Net 37,000 48,000 Merchandise Inventory 64,000 100,000 Prepaid Expenses 21,000 15,000 $ Total Current Assets 186,000 $ 194,000 Total Assets $ 261,000 $ 326,000 Total Current Liabilities 100,000 97,000 Total Liabilities 100,000 133,000 Common Stock $1 par (11,000 shares) 11,000 $1 par (15,000 shares) 15,000 Total Stockholders' Equity 161,000 193,000 Market Price per Share of Common Stock 71.26 111.54 Dividends Paid per Common Share 0.90 0.70 Selected balance sheet data at the beginning of the current year: Digitalized Very Zone Balance sheet: Accounts Receivables, net $ 40,000 $ 49,000 Merchandise Inventory 83,000 85,000 Total Assets 259,000 270,000 Common Stock: $1 par (11,000 shares) 11,000 $1 par (15,000 shares) 15,000 Print Done Requirements - 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. Print Done