First blank for number one is high or low. Second blank is like games or our pla
ID: 2818232 • Letter: F
Question
First blank for number one is high or low. Second blank is like games or our play. Third blank is our play or like games. First blank in number two is higher or lower. Second blank is higher or lower. First blank in number three is 1.05x or .80x. Second blank is greater or Lower x Apla Student Question courses aplia.com/at/serviet/quizlquiz,action takeQuizšiquiz,pr obGuid-QNAPCOABO1010000004520df900600008 ctxe ream-00588ck m 15 Attempts: Keep the Highest: I9 Aa Aa 3. 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: Franklin Aerospace has a quick ratio of 2.00x, $36,225 in cash, $20,125 in accounts receivable, some inventory, total current assets of $80,500, and total current liabilities of $28,175. The company reported annual sales of $800,000 in the most recent annual report. Over the past year, how often did Franklin Aerospace sell and replace its inventory? O 2.86 x 0 36.44x 8.01x 33.13 The inventory turnover ratio across companies in the aerospace industry is 36.44x. Based on this information, which of the following statements s true for Franklin Aerospace? O Franklin Aerospace is holding less inventory per dolar of sales compared to the industry average. Franklin Aerospace is holding more inventory per dollar of sales compared to the industry average. F3 F5 F6 F7 Fe F9 P10 F11 F12 DrtSce InserExplanation / Answer
1.A low days of sales outstanding represents an efficient credit and collection policy. Between the two companies, Like Games is collecting cash from its customers faster than Our Play ,but both companies are collecting their receivables less quickly that the industry average.
Days sales collection = 365 / (Sales /Accounts Receivable)
Our Play = 365 / ( 800000 / 31200 ) = 365 / 25.64 = 14.24 Days
Like Games = 365 / ( 800000 / 21600 ) = 365 / 37.037 = 9.86 Days
Industry = 365 / ( 2040000 / 30800 ) = 365 / 66.23 = 5.51 Days
2.Our Play’s fixed assets turnover ratio is lower than that of Like Games. This could be because Our Play is a relatively new company, so the acquisition cost of its fixed assets is higher than the recorded cost of Like Games’s net fixed assets.
Fixed Assets Turnover = Sales / Fixed Assets
Our Play = 800000 / 640000 = 1.25
Like Games = 800000 / 440000 = 1.82
3.Like Games’s total assets turnover ratio is 1.05x, which is higher than the industry’s average total assets turnover ratio. In general, a higher total assets turnover ratio indicates greater efficiency.
Total Assets Turnover = Sales / Total Assets
Our Play = 800000 / 1000000 = 0.80
Like Games = 800000 / 760000 = 1.05
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