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 tumover ratio. Consider the following case: Crawford Construction has a quick ratio of 2.00x,$32,175 in cash, $17,875 in accounts recelvable, some inventory, total current assets of $71,500, and total current liabilities of $25,025. The company reported annual sales of $300,000 in the most recent annual report. Additionally, the company's cost of goods sold is 75% of sales. Over the past year, how often did Crawford Construction sell and replace its inventory? 8.01x 11,54x 2.86x 10.49x The inventory turnover ratio across companies in the construction industry is 8.9165x. Based on this information, which of the following statements is true for Crawford Construction? Crawford Construction is holding less inventory per dollar of sales compared with the industry average. Crawford Construction is holding more inventory per dollar of sales compared with the industry average. You are analyzing two companies that manufacture electronic toys-Lke Games Inc. and Our play Inc. Uke Games was iaunched elght 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 $300,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $765,000. 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.) Using this information, complete the following statements to include in your analysis. 1. Our Play has days of sales tied up in receivables, which is much than the industry average. It takes Our Pay time to collect cash from its customers than it takes Like Games. 2. Lke Games's fixed assets turnover ratio is than that of Our Pay. 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 amount for its fixed assets. 3. The average total assets turnover in the electronic toys industry is , which means that of sales is being generated with every doliar of investment in assets. A total assets turnover ratio indicates greater efficiency. Both companies' total assets turnover ratios are than the industry average. Using this information, complete the following statements to include in your analysis. 1. Our Play has days of sales tied up in receivable collect cash f istomers than it takes Like Games. 2.LikeGamessacquisitionoetsturnoverratioisixedassetsisrecordedathistoricvalueswhenthecompanyboughtitsassetsandha Assuming that nxedassets prices (not book values) rose over the past six years due to inflation, Our Play assets. 3. The average total assets turnover in the electronic toys industry is , which means that every dollar of investment in assets. 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Both companies' total assets turnover the industry average. collect cash from its customers than it takes Like Games. 2. Like Games's fixed assets turnover ratio is than that of Our Play. This is because Like Games was formed acquisition cost of its fixed assets is recorded at historic values when the company bought its assets and has been dep Assuming that fixed assets prices (not es) rose over the past six years due to inflation, Our Play paid a assets. 3. The average total assets turnover in tr bic toys industry is , which means that every dollar of investment in assets. A total assets turnover ratio indicates greater efficiency. Both compan ratios are than the industry average. Using this information, complete the following statements to include in your analysis. 1. Our Play has days of sales tied up in receivables, which is much collect cash from its customers than it takes Like Games. 2. Like Games's fixed assets turnover ratio is than that of Our Play. This is acquisition cost of its fixed assets is recorded at historic values when the company bo Assuming that fixed assets prices (not book values) rose over the past six years due assets. 3. The avera ssets turnover in the electronic toys industry is every doll stment in assets. A total assets turnover ratio indicate: ratios are than the industry average