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Assume that you are purchasing an investment and have decided to invest in a compary...

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Accounting

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Assume that you are purchasing an investment and have decided to invest in a compary in the digtal phone business. You have narrowed the choice to Dighal Corp. and Very Notwork, inc. and have assembled the following date. Your strategy is to imest in companies that have fow pricolearnings rabios tut appear in (Click to view the income statement data.) be in good shape financially. Assume that you have analyzed al other factors and that your decision depends on the resuts of ratio analysis. fClick to view the basance sheet and market price data) Read the reourements. Data table Selected income statement data for the current year: Data table Selected balance sheet and market price data at the end of the current year: Data table Selected balance sheet data at the beginning of the current year: 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. Price/earnings ratio g. Dividend payout 2. Decide which company's stock better fits your investment strategy

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