Asset management ratios are used to measure how effectively a firm manages its assets, by relating the arnount 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 indude the average collection period (also cailed 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,$34,875 in cash, $19,375 in accounts receivable, some inventory, total current assets of $77,500, and total current liabilities of $27,125. The company reported annual sales of $800,000 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 Monroe Manufacturing sell and replace its inventory? The inventory turnover ratio across companies in the manufacturing industry is 28.391x. Based on this information, which of the following stotements is true for Monroe Manufacturing? Monroe Manufacturing is holding less inventory per dollar of sales compared with the industry average. Monroe Manufacturing is holding more 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 Inci Like.Garnes was launched eight years ago. whereas Our Play is a relatively new company that has been in operation for only the past two yearsi However, both companies have an equal market share with sales of $800,000 esch. You've collected company data to compare Like Games and Our Piay. Last year, the average sales for all industry competitors was $2,040,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. You've coliected data from the companies' financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) Uwing this information, corplete the following statechents to indide in rouf analysis. 1. Dur play has days of sales tied up in receivables, which is much than the industry average, it takes Our Ptay time to callect eash from its customers than it takes Like Games. 2. Whe Games's foced assets turnover ratio is than that of Our Play. This is bocauee Like Games was formed eight years ago; so the acquavition cost of its fixed assets is reconded at historic values when the company bought its assets and has beee deprecioted since then Assiming that fixed assets prices (not book values) rose over the past six years due to infiation, Our Play puid a amount for its fxed assets 3. The average total assets furnover in the electronic toys industry is which means that of sales is being generated with every dollar of investment in assets, A total assets tumover ratio indicates greater efficiency. Both companies' total assets turnover ratios are than the industry average