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 perlod (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 Monroe Manufacturing has a quick ratio of 2.00x, $29,475 in cash, $16,375 in accounts receivable, some inventory, total current assets of s65,500, and total current liabilities of s$22,925. The company reported annual sales of $400,000 in the most recent annual report. did Monroe Manufacturing sell and replace its inventory? O 20.36 x 2.86 x O 22.40x O 8.01 x The inventory turnover ratio across companies in the manufacturing industry is 17.31x. Based on this information, which of the following statements is true for Monroe Manufacturing7 The inventory turnover ratio across companies in the manufacturing industry is 17.31x. Based on this information, which of the following statements is true for Monroe Manufacturing? O Monroe Manufacturing is holding more inventory per dollar of sales compared to the industry average. O Monroe Manufacturing is holding less inventory per dollar of sales compared to the industry average. Data Collected (in dollars) Accounts receivable Net fixed assets Total assets Like Games 10,800 220,000 380,000 Our Play 15,600 320,000 500,000 Industry Average 15,400 867,000 938,400 Using this information, complete the following statements to include in your analysis. 1. Our Play has time to collect cash from its customers than it takes Like Games. days of sales tied up in receivables, which is much than the industry average. It takes Our Play 2. Like Games's fixed assets turnover ratio is 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 Assuming that fixed assets prices (not book values) rose over the past six years due to inflation, Our Play paid a assets. depreciated since then. amount for its fixed 3. The average total assets turnover in the electronic toys industry is 1.09x, which means that $1.09 of sales is being generated with every dollar of investment in assets. A are total assets turnover ratio indicates greater efficiency. Both companies' total assets turnover ratios than the industry average