You are analyzing two companies that manufacture electronic toysIntelliGames Inc. and BrainGames Inc. IntelliGames was launched eight years ago, whereas BrainGames is a relatively new company that has only been in operation for the past two years. However, both companies have an equal market share with sales of $100,000 each. Youve gathered up company data to compare IntelliGames and BrainGames.

For the same period, the average sales for 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. Youve collected data from the companies financial statements, and the information follows:

Data Collected (in dollars)

	IntelliGames Inc.	BrainGames Inc.	Industry Average
Accounts receivables	$2,700	$3,900	$2,875
Net fixed assets	55,000	80,000	216,750
Total assets	95,000	125,000	234,600

Using the preceding information, complete the following statements.

1. BrainGames Inc. Inc. has days of sales tied up in receivables, which is much than the industry average. This means that it takes BrainGames Inc. time to collect cash from its customers than IntelliGames Inc.

2. IntelliGames Inc.s fixed-asset turnover ratio is than that of BrainGames Inc. This is because IntelliGames was formed eight years ago, so the acquisition cost of its fixed assets was recorded at their historic values when the company purchased the assets and has been depreciated since. Assuming that fixed asset prices (not book values) rose over the past six years due to inflation, BrainGames paid a amount for its fixed assets.

3. The average total asset turnover in the electronic toys industry is 1.09, which means that $1.09 of sales is being generated with every dollar of investment in assets. A total asset turnover ratio indicates greater efficiency. Both companies total asset turnover ratios are than the industry average.