Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can someone help me with the problem? Using this information, complete the following statements to include in your analysis. 1. Our Play has days of

Can someone help me with the problem?
image text in transcribed
image text in transcribed
image text in transcribed
Using this information, complete the following statements to include in your analysis. 1. Our Play has days of sales bied up in receivables, which is much than the industry average. It takes Our Pay time to collect cash from its tomers 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 historic values when the company bought its assets and has been depreciated since then. Assuming that flxed 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 turnover ratio indicates greater efficiency. Both companies' total assets turnover ratios are than the industry average. 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 oenerating. Examples of asset managernent ratios include the average collection period (also called the days sales outstanding rabo), the inventory turnover ratio, the fixed asset tumover ratio, and the total asset tumove ratio. Consider the following case: Monroe Manulacturing 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 ooods sold is 75% of sales. Over the past year, how often did Monroe Manufacturing sell and replace its inventory? 2.866x 25.81x 8.01x 28.39x The inventory turnover ratio across companies in the manufacturing industry is 28.391x. Based on this information, which of the following statements is true, for Monroe Manulacturing? Monroe Manufacturing is holding more inventory per dollar of sales compared with the industry average. Monroe Manufacturing 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 Pay 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 collected 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' finandal statements. This information is listed as follows: (Note: Assume there are 365 days in a year.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Principles And Applications

Authors: Sheridan Titman, Arthur Keown, John Martin

13th Global Edition

1292222182, 978-1292222189

More Books

Students also viewed these Finance questions