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 turnovem 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 annualeport. Additionally, the company's cost of goods sold is 75% of sales. Over the past year, how often did Polk Software Inc. sell and replace its inventory? 6.01x 2.86x 3.42x 3.76x The inventory turnover ratio across companies in the software industry is 3.762x. Based on this information, which of the following statements is true for Polk Software Inc.? O Polk Software Inc. is holding less inventory per dollar of sales compared with the industry average. O Polk Software Inc. 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 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.) Data Collected (in dollars) Like Games Our Play Industry Average: Accounts receivable 2,700 Net fixed assets Total assets 3,900 3,850 55,000 80,000 216,750 95,000 125,000) 234,600 Using this information, complete the following statements to include in your analysis HIJIK x Links 83F 449 PM Data Collected (in dollars) Like Games Our Play Industry Average Accounts receivable 2,700 Net fixed assets 55,000 Total assets 3,900 3,850 80,000 216,750 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, cash from its customers faster than 2. Our Play's fixed assets turnover ratio is acquisition cost of its fixed assets is is collecting , but both companies are collecting their receivables less quickdy than the industry average. than that of Like Games. This could be because Our Play is a relatively new company, so the than the recorded cost of Like Games's net fixed assets. which is 3. Uke Games's total assets turnover ratio is higher total assets turnover ratio indicates greater efficiency. than the industry's average total assets turnover ratio. In general, a