2. Asset management ratios 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 Polk Software Inc. has a quick ratio of 2.00x, $32,850 in cash, $18,250 in accounts receivable, some inventory, total current assets of $73,000, and total current liabilities of $25,550. The company reported annual sales of $100,000 in the most recent annual report. Over the past year, how often did Polk Software Inc. sell and replace its inventory? @ 8.01% 5.03% 0 2.86% 0.4.57X The inventory turnover ratio across companies in the software industry is 5.027x. Based on this information, which of the following statements is true for Polk Software Inc.? O Polk Software Inc. is holding more inventory per dollar of sales compared with the industry average Polk Software Inc. is holding less inventory per dollar of sales compared with the industry average: You are analyzing two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $100,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all Industry The inventory turnover ratio acrous companies in the software outry 5.027. tased on a normation, which of the following startements true for Polk Software Inc.) Polk Software Inc. is holding more inventory per dollar of a compared with the industry average Polk Software Inc. is holding less inventory per dollar of a compared with the industry were You are analying two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $100,000 each. You ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year, You've collected data from the companies financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year) Accounts receivable Data Collected (in dollars) Like Games Our Play Industry Average 2.700 3,900 3,850 55,000 80,000 216,750 95,000 125,000 234,600 Net fixed assets Total assets Using this information, complete the following statements to include in your analysis days of sales outstanding represents an efficient credit and collection policy, Between the two companies is collecting cash from its customers faster than but both companies are collecting their receivables less quickly than the industry average 2: Our Play's fixed assets turnover ratio is than that of Like Games. This could be because Our Play is a relatively new company, to the acquisition cost of its fixed assets is y than the recorded cost of Like Games's ret fixed assets 3. Like Games's total assets turnover ratio is which is than the industry's average total assets turnover ratio. In general, higher total assets turnover ratio indicates greater efficiency You are analyzing two companies that manufacture electronic toys-Uke Games Inc. and Our Play Inc. Like Games was launched eight years ago whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $100,000 each. You've collected company data to compare Uke Games and Our Play. Last year, the average sales for all industry competitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. You ve collected data from the companies' financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) Accounts receivable fixed assets Total assets Data Collected (in dollars) Like Games Our Play 2,700 3,900 55,000 80,000 95,000 125,000 Industry Average 3,850 216,750 234,600 Using this information, complete the following statements to include in your analysis. ca 1. A days of sales outstanding represents an efficient credit and collection policy. Between the two companies, is collecting its customers faster than but both companies are collecting their receivables less quickly than the industry average. high 2. O fixed assets turnover ratio is than that of Like Games. This could be because Our Play is a relatively new company, so the ad low cost of its fixed assets is than the recorded cost of Like Games's net fixed assets. 3. Like Games's total assets turnover ratio is which is than the industry's average total assets turnover ratio. In general, a higher total assets turnover ratio indicates greater efficiency . Polk Software Inc. is holding more inventory per dollar of sales compared with the industry average, Polk Software Inc. is holding less inventory per dollar of sales compared with the industry average. Fou are analyzing two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, Whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market hare with sales of $100,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industry ompetitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. U od data from the companies financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) Data Collected in dollars) Like Games Our Play Industry Average Accounts receivable 2,700 3,900 3,850 Net fixed assets 55,000 80,000 216,750 Total assets 95,000 125,000 234,600 ng this information, complete the following statements to include in your analysis. A days of sales outstanding represents an efficient credit and collection policy. Between the two companies, is collecting cash from its customers faster than , but both companies are collecting their receivables less 94 industry average Our Play Our Play's fixed assets turnover ratio is than that of Like Games. This could be because Our Play is company, so the acquisition cost of its fixed assets is than the recorded cost of Like Games's net fixed assets. Like Games Like Games's total assets turnover ratio is which is than the industry's average total assets turnover ratio. In general, a higher total assets turnover ratio indicates greater efficiency. The inventory turnover ratio across companies in the software industry is 5.027x. Based on this information, which of the following statements is true for Polk Software Inc.? O Polk Software Inc. is holding more inventory per dollar of sales compared with the industry average. Polk Software Inc. is holding less inventory per dollar of sales compared with the industry average. You are analyzing two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, 1 Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market with sales of $100,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. You've collected data from the companies' financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) Data Collected (in dollars) Like Games Our Play Accounts receivable 2,700 3,900 Net fixed assets 55,000 80,000 Total assets 95,000 125,000 Industry Average 3,850 216,750 234,600 Using this information, complete the following statements to include in your analysis. 1. A days of sales outstanding represents an efficient credit and collection policy. Between the two companies is collecting cash from its customers faster than but both companies are collecting their receivables less quickly than the industry average. 2. Our Play's fixed assets turnover ratl than that of Like Games. This could be because Our Play is a relatively new company, so the Like Games acquisition cost of its fixed assets is han the recorded cost of Like Games's net fixed assets. 3. Like Games's total assets turnover Our Play V , which is than the industry's average total assets turnover ratio. In general, a higher total assets turnover ratio indicates greater efficiency. Polk Software Inc. is holding more inventory per dollar of sales compared with the industry average. O Polk Software Inc. is holding less inventory per dollar of sales compared with the industry average. You are analyzing two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $100,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all Industry competitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. roud data from the companies financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) Data Collected (in dollars) Like Games Our Play Industry Average Accounts receivable 2,700 3,900 3,850 Net fixed assets 55,000 80,000 216,750 Total assets 95,000 125,000 234,600 ing this information, complete the following statements to include in your analysis. days of sales outstanding represents an efficient credit and collection policy. Between the two companies, is collecting cash from its customers faster than , but both companies are collecting their receivables less quickly than the industry average. Our Play's fixed assets turnover ratio is than that of Like Games. This could be because Our Play is a relatively new company, so the acquisition cost of its fixed assets is than the recorded cost of Like Games's net fixed assets. Like Games's total assets turnover ratio higher which is than the industry's average total assets turnover ratio. In general, a higher total assets turnover ratio indicat lower r efficiency. more inventory per dollar of sales compared with the industry average. Polk Software Inc. is holding less inventory per dollar of sales compared with the Industry average. You are analyzing two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago. whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market shar -ales of $100,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all Industry comp $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year, You've collected data from the companies financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year) Data Collected (in dollars) Like Games Our Play Accounts receivable 2,700 3,900 Net fixed assets 55,000 80,000 Total assets 95,000 125,000 Industry Average 3,850 216,750 234,600 Using this information, complete the following statements to include in your analysis, 1. A days of sales outstanding red lower bn efficient credit and collection policy. Between the two companies, is collecting cash from its customers faster than but both companies are collecting their receivables less quickly than the industry average. higher 2. Our Play's fixed assets turnover ratid than that of Like Games. This could be because Our Play is a relatively new company, so the acquisition cost of its fixed assets is than the recorded cost of Like Games's net fixed assets. 3. Like Games's total assets turnover ratio is which is than the industry's average total assets turnover ratio. In general, a higher total assets turnover ratio indicates greater efficiency. whe Inc. Like Games was launched eight years ago, Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market shareas of $100,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. You've collected data from the companies financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) Data Collected (in dollars) Like Games Our Play Industry Average Accounts receivable 2,700 3,900 3,850 Net fixed assets 55,000 80,000 216,750 Total assets 95,000 125,000 234,600 Using this information, complete the following statements to include in your analysis. + 1. A days of sales outstanding represents an efficient credit and collection policy. Between the two companies, is collecting cash from its customers faster than 1.05x , but both companies are collecting their recelvables less quickly than the industry average. 2. Our Play's fixed assets turnover ratio is than that of Like Games. This could be because Our Play is a relatively new company, so the 0.80x acquisition cost of its fixed assets is han the recorded cost of Like Games's net fixed assets. 3. Uke Games's total assets turnover ratio is which is than the industry's average total assets turnover ratio. In general, a higher total assets turnover ratio indicates greater efficiency. You've collected data from the companies' financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) Data Collected (in dollars) Like Games Our Play Industry Average Accounts receivable 2,700 3,900 3,850 Net fixed assets 55,000 B0,000 216,750 Total assets 95,000 125,000 234,600 Using this information, complete the following statements to include in your analysis. . 1. A days of sales outstanding represents an efficient credit and collection policy, Between the two companies, is collecting cash from its customers faster than but both higher ps are collecting their receivables less quickly than the industry average. 2. Our Play's fixed assets turnover ratio is than that o mes. This could be because Our Play is a relatively new company, so the lower acquisition cost of its fixed assets is than the recor f Like Games's net fixed assets. 3. Uke Games's total assets turnover ratio is which is than the industry's average total assets turnover ratio. In general, a higher total assets turnover ratio indicates greater efficiency
