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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 Network, Inc and have assembled the following data.

$($Click to view the income statement data$)$

$($Click to view the balance sheet and market price data.$)$

Requirement $1$a$.$ Compute the acid$-$test ratio for both companies for the current year

Begin by selecting the formula to compute the acid$-$test ratio.

Acid$-$test ratio $=$ Cost of goods sold $$ Average merchandise inventory

Now, compute the acid$-$test ratio for both companies. $($Round your answers to two decimal places, XX$.$

$\backslash$table$[[,$Digitalized,Very Network$],[$Acid$-$test ratio,,$]]$

Requirement $1$b$.$ Compute the inventory turnover for both companies for the current year

Begin by selecting the formula to compute the inventory turnover.

Inventory turnover $=$

Now, compute the inventory turnover for both companies. $($Round your answers to two decimal places,

$\backslash$table$[[,$Digitalized,Very Network$],[$Inventory turnover,,$]]$

Requirement $1$c$.$ Compute the days' sales in receivables for both companies for the current year.

Selected income statement data for the current year

$\backslash$table$[[,$Digitalized,Very Network$],[$Net Sales Revenue $($all on credit$),$$$,423,035$$$,497,860],[$Cost of Goods Sold,,$208,000,261,000],[$Interest Expense,,$0,19,000],[$Net Income,,$62,000,68,000]]$

Data table

Selected balance sheet and market price data at the end of the current year:

$\backslash$table$[[,$Digitalized,Very Network$],[$Current Assets$],[$Cash$,$$$,24,000,$$$,19,000],[$Short$-$term Investments,$41,000,,18,000],[$Accounts Receivables, Net,$36,000,,47,000],[$Merchandise Inventory,A$,67,000,,100,000],[$Prepaid Expenses,$19,000,,13,000],[$Total Current Assets,$${?}_{?},187,000,$$$,197,000],[$Total Assets,$$,261,000,$$$,323,000],[$Total Current Liabilities,,$101,000,,100,000],[$Total Liabilities,,$101,000,,133,000],[$Common Stock:,,,,$],[$$$1$ par shares$),,10,000,,]]$

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