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 indude the average collection period (also called the days sales outstanding ratio), the irventory 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,534,875 in cash, $19,375 in accounts receivable, some inventory, total current assets of $77,500, and total current liablities of $27,125. The company reported annual sales of $800,000 in the most recent annual report. Additionally, the cornpamy's coet of goods sold is 75% of sales. Over the past year, how often did Monroe Manufacturing sell and replace its inventory? 8. 01 28.39x 25.81x 2. 46x The inventory turnover ratio across companies in the manufacturing industry is 28 a 91x, Based on this information, which of the following statements is true for Monroe Marutacturing? The inventory tumover ratio acrost companies in the marufacturing industry is 28.391x. Based or this information, which of the following statements is true for Monroe Manufacturing? Monroe Manufacturing is holding less inventory per dollar of sales compared with the industry average. Morroe Manufacturing 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. 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 $800,000 each. You've coliected company data to compare Like Games and Our Play, 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 collected data from the companies' financial statements. This information is listed as followst (Note: Assume there are 365 days in a year.) Using this information, complete the following statements to inciude in your analysis. 1. Que Piay has days of sales ted up in receivables: which s much than the industry averape. It takes Our Play time to collect cash from its custamens than it takes uke Games. 2. Like Gimes's fixed assets turnover ratio is than that of Our Play, This is beceuge Lke Games was formed eight rears ago; so the 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 Play to 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 eight years ago, so the acquisition cost of its fixed assets is recorded at histonc 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 dollar of investment in assets. A total assets tumover ratio indicates greater efficiency. Both companies' total assets turnover ratios are thon the industry average