1. Our Play has (14.4/9.86) days of sales tied up in receivables, which is much (higher/lower) than the industry average. It takes Our Play (less/more) time to collect cash from its customers than it takes Like Games.

2. Like Games’s fixed assets turnover ratio is (higher/lower) than that of Our Play. This is because Like Games was formed eight years ago, so the acquisition cost of its fixed assets is recorded at historic values when the company bought its assets and has been depreciated since then. Assuming that fixed assets prices (not book values) rose over the past six years due to inflation, Our Play paid a (higher/lower) amount for its fixed assets.

3. The average total assets turnover in the electronic toys industry is (1.09x/0.80x) , which means that (0.80/1.09) of sales is being generated with every dollar of investment in assets. A (higher/lower) total assets turnover ratio indicates greater efficiency. Both companies’ total assets turnover ratios are (higher/lower) than the industry average.

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Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio. Consider the following case: Walker Telecommunications has a quick ratio of 2.00x, $35,550 in cash, $19,750 in accounts receivable, some inventory, total current assets of $79,000, and total current liabilities of $27,650. The company reported annual cost of goods sold of $200,000 in the most recent annual report. Over the past year, how often did Walker Telecommunications sell and replace its inventory? 8.01 x O 9.28 x O 2.86 x O 8.44 x Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio. Consider the following case: Walker Telecommunications has a quick ratio of 2.00x, $35,550 in cash, $19,750 in accounts receivable, some inventory, total current assets of $79,000, and total current liabilities of $27,650. The company reported annual cost of goods sold of $200,000 in the most recent annual report. Over the past year, how often did Walker Telecommunications sell and replace its inventory? 8.01 x O 9.28 x O 2.86 x O 8.44 x

Answer rating: 100% (QA)

1 Our Play has DSO Day Sales outstanding accounts receivablesTotal sales 365 days 1560... View the full answer