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

Use the preceding information to complete the following statements.

1. A 1)________ days sales outstanding, or average collection period, represents an efficient credit and collection policy. Between the two companies, 2)_______ is collecting cash from its customers faster than 3)______ ; but both companies are collecting their receivables less quickly than the industry average.

2. BrainGames Inc.s fixed asset turnover ratio is 4)________ than that of IntelliGames Inc. This could be because BrainGames is a relatively new company, such that the acquisition costs and book values of its fixed assets is 5)_________ than the acquisition costs and book values of IntelliGamess net fixed assets.

3. IntelliGames total asset turnover ratio is 6)_________ , which is 7)_______ than the industrys average total asset turnover ratio. In general, a higher total asset turnover ratio indicates greater efficiency.

Choices

1) low

high

2) IntelliGames Inc

BrainGames Inc

3) IntelliGames

BrainGames

4) lower

higher

5) lower

greater

6) 1.05x

0.80x

7) lower

higher