3. 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, $25,425 in cash, $14,125 in accounts receivable, some inventory, total current assets of $56,500, and total current liabilities of $19,775. The company reported annual sales of $400,000 in the most recent annual report. Over the past year, how often did Polk Software Inc. sell and replace its inventory? 8.01x 25.96x O 23.60x 2.86 x The inventory turnover ratio across companies in the software industry is 20.06x. Based on this information, which of the following statements is true for Polk Software Inc.? Polk Software Inc. is holding less inventory per dollar of sales compared to the industry average. O Polk Software Inc. is holding more inventory per dollar of sales compared to 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 $400,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $1,020,000. 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