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 turnover ratio.

Consider the following case: Polk Software Inc. has a quick ratio of 2.00x, $24,750 in cash, $13,750 in accounts receivable, some inventory, total current assets of $55,000, and total current liabilities of $19,250. The company reported annual cost of goods sold of $200,000 in the most recent annual report.

Over the past year, how often did Polk Software Inc. sell and replace its inventory?

O 12.12 x

O 2.86 x

8.01 x

13.33 x

The inventory turnover ratio across companies in the software industry is 13.33x. 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 to the industry average.

O Polk Software Inc. is holding more inventory per dollar of sales compared to the industry average.

3. Asset manogement 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 coliection period (ako called the days sales outatanding ratio), the invertory tumover ratio, the fixed asset turnever ratio, and the total asset turnover ratio. Consider the following case: Polk software inc, has a quick ratio of 2.00x,$24,750 in cash, 113,750 in accounts receivable, some inventory, total current assets of \$55,000, and total carrent fiablities of $19,250, The company reported annual cost of goods sold of $200,000 in the most recent annual report. Over the past year, how oten did foak Sofware inc sell and ieplace its inventery? 12.12x 26 ED 1333x The invenfery turnover ratio across companies in the software industry is 13.32x. Based on this informabon, which of the following statements is true for Aok software inc:? Polk Software Inc, is holising less inventary per dollar of sales compared to the industry arerage. Pulk sotiware Ine is holding more imventory per dollar of sales compured to the induntry averaye. The inventory turnover ratio across companies in the software industry is 13.33x. Based on this information, which of the following statements is true for Polk Software inc.? Polk Software inc, is holding less inventory per dollar of sales compared to the industry average. Polk Software inc. is holding more inventory per dollar of sales compared to 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 $200,000 each. You've collected company data to compare Uike Games and Our Play. Last year, the average sales for all industry competitors was $510,000. 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' finandial 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 recelvables, which is much collect cash from its customers than it takes Like Games. than the industry average. It takes Our Play_ time to 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 historic values when the company bought its assets and has been depreciated since then. Assuming that fioed assets prices (not book values) rose over the past six years due to inflation, Our Play pald 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 are than the industry average. total assets turnover ratio indicates greater efficiency. Both companies' total assets turnover ratios Polk Software Inc. is holding more inventory per dollar of sales compared to 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 mar share with sales of $200,000 each, You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industr competitors was $510,000, 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' finandial 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 vour analysis. 1. Our Play has days of sales tied up in receivables, which is much collect cash from its customers than it takes tike Games. than the industry average, It takes Our Play time to 2. Lke Games's flxed assets turnover ratio is than that of Our Play. This is because tike Games was formed eight vears ago, so the acquision cost of its fixed assets is recorded at historic values when the company bought its assets and has been depreciated since then. Assuming that food 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 tumover in the electronic tors industry is every dollar of investment in assets, A are than the industry average. total assets turnover which means that of sales is being generated with of sales is being generated with mpanles' total assets turnover ratios 3. Asset manogement 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 coliection period (ako called the days sales outatanding ratio), the invertory tumover ratio, the fixed asset turnever ratio, and the total asset turnover ratio. Consider the following case: Polk software inc, has a quick ratio of 2.00x,$24,750 in cash, 113,750 in accounts receivable, some inventory, total current assets of \$55,000, and total carrent fiablities of $19,250, The company reported annual cost of goods sold of $200,000 in the most recent annual report. Over the past year, how oten did foak Sofware inc sell and ieplace its inventery? 12.12x 26 ED 1333x The invenfery turnover ratio across companies in the software industry is 13.32x. Based on this informabon, which of the following statements is true for Aok software inc:? Polk Software Inc, is holising less inventary per dollar of sales compared to the industry arerage. Pulk sotiware Ine is holding more imventory per dollar of sales compured to the induntry averaye. The inventory turnover ratio across companies in the software industry is 13.33x. Based on this information, which of the following statements is true for Polk Software inc.? Polk Software inc, is holding less inventory per dollar of sales compared to the industry average. Polk Software inc. is holding more inventory per dollar of sales compared to 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 $200,000 each. You've collected company data to compare Uike Games and Our Play. Last year, the average sales for all industry competitors was $510,000. 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' finandial 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 recelvables, which is much collect cash from its customers than it takes Like Games. than the industry average. It takes Our Play_ time to 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 historic values when the company bought its assets and has been depreciated since then. Assuming that fioed assets prices (not book values) rose over the past six years due to inflation, Our Play pald 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 are than the industry average. total assets turnover ratio indicates greater efficiency. Both companies' total assets turnover ratios Polk Software Inc. is holding more inventory per dollar of sales compared to 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 mar share with sales of $200,000 each, You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industr competitors was $510,000, 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' finandial 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 vour analysis. 1. Our Play has days of sales tied up in receivables, which is much collect cash from its customers than it takes tike Games. than the industry average, It takes Our Play time to 2. Lke Games's flxed assets turnover ratio is than that of Our Play. This is because tike Games was formed eight vears ago, so the acquision cost of its fixed assets is recorded at historic values when the company bought its assets and has been depreciated since then. Assuming that food 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 tumover in the electronic tors industry is every dollar of investment in assets, A are than the industry average. total assets turnover which means that of sales is being generated with of sales is being generated with mpanles' total assets turnover ratios