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:

Crawford Construction has a quick ratio of $2\mathrm{.}00x,$$$32,175$ in cash, $$17,875$ in accounts receivable, 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?

The inventory turnover ratio across companies in the construction industry is $8\mathrm{.}9165x.$ Based on this information, which of the following statements is

true for Crawford Construction?

Crawford Construction is holding more inventory per dollar of sales compared with the industry average.

Crawford Construction is holding less inventory per dollar of sales compared with the industry average.The inventory turnover ratio across companies in the construction industry is $8\mathrm{.}9165x.$ Based on this information, which of the following statements is

true for Crawford Construction?

Crawford Construction is holding more inventory per dollar of sales compared with the industry average.

Crawford Construction is holding less 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 $$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.

Our Play has

days of sales tied up in receivables, which is much

than the industry average. It takes Our Play

time to

collect cash from its customers than it takes Like Games.

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 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.

The average total assets turnover in the electronic toys industry is

$.,$ which means that

of sales is being generated with

every dollar of investment in assets. A

$\_$ total assets turnover ratio indicates greater efficiency. Both companies' total assets turnover

ratios are

than the industry average.Market value ratios

Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market value

ratios, relate to a firm's observable market value, stock prices, and book values, integrating information from both the market and the firm's financial

statements.

Consider the case of Cold Goose Metal Works Inc:

Cold Goose Metal Works Inc. just reported earnings after tax $($also called net income$)$ of $$9,000,000$ and a current stock price of $$34,00$

per share. The company is forecasting an increase of $25\%$ for its after$-$tax income next year, but it also expects it will have to issue

$2,500,000$ new shares of stock $($raising its shares outstanding from $5,500,000$ to $8,000,000).$

If Cold Goose's forecast turns out to be correct and its price$/$earnings $(\frac{P}{E})$ ratio does not change, what does the company's management expect its

stock price to be one year from now? $($Round any $\frac{P}{E}$ ratio calculation to four decimal places.$)$

$$29\mathrm{.}23$ per share

$$34\mathrm{.}00$