Using this information, complete the following statements to include in your ana

Question

Using this information, complete the following statements to include in your analysis than the industry average. It takes Our Play 1, our play has time to collect cash from its austomers than it takes Like Games. days of sales tied up in receivables, which is much 2-Uke Games's faced 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 foxed assets is recorded at historic values when the company bought its assets and has been depreciated since then. Assuming that foxed assets prices (not book values) rose over the past six years due to inflation, Our Play paid a assets. amount for its fixed 3. The average total assets turnover in the electronic toys industry is 1.09x, which means that $1.09 of sales is being generated with every dollar of investment in assets. A are total assets turnover ratio indicates greater efficiency. Both companies' total assets turnover ratios than the industry average

Explanation / Answer

Answers:

1. Our Play has 14.24‘4f  days of sales tied up in receivables, which is much higherV/ than the industry average. It takes Our Play moreV/ time to collect cash from its customers than it takes Like Games.

2. Like Games’s xed assets turnover ratio is higher than that of Our Play. This is because Like Games was formed eight years ago, so the acquisition cost of its xed assets is recorded at historic values when the company bought its assets and has been depreciated since then. Assuming that xed assets prices (not book values) rose over the past six years due to inflation, Our Play paid a higherV' amount for its xed assets.

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

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