Crockett Electronics has a quick ratio of 2.00x, $30,150 in cash, $16,750 in accounts receivable, some inventory, total current assets of $67,000, and total current liabilities of $23,450. The company reported annual sales of $300,000 in the most recent annual report. A) Over the past year, how often did Crockett Electronics sell and replace its inventory? 2.86x 16.42x 8.01x 14.93x B) The inventory turnover ratio across companies in the electronics industry is 12.6905x. Based on this information, which of the following statements is true for Crockett Electronics? Crockett Electronics is holding less inventory per dollar of sales compared with the industry average. Crockett Electronics is holding more inventory per dollar of sales compared with the industry average. You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play 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 $300,000 each. You’ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $765,000. 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’ financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) Data Collected (in dollars) Like Games Our Play Industry Average Accounts receivable 8,100 11,700 11,550 Net fixed assets 165,000 240,000 650,250 Total assets 285,000 375,000 703,800 C) Using this information, complete the following statements to include in your analysis. 1. Our Play has days of sales tied up in receivables, which is much than the industry average. It takes Our Play time to collect cash from its customers 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 fixed 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 averag

Crockett Electronics has a quick ratio of 2.00x, $30,150 in cash, $16,750 in accounts receivable, some inventory, total current assets of $67,000, and total current liabilities of $23,450. The company reported annual sales of $300,000 in the most recent annual report. A) Over the past year, how often did Crockett Electronics sell and replace its inventory? 2.86x 16.42x 8.01x 14.93x B) The inventory turnover ratio across companies in the electronics industry is 12.6905x. Based on this information, which of the following statements is true for Crockett Electronics? Crockett Electronics is holding less inventory per dollar of sales compared with the industry average. Crockett Electronics is holding more inventory per dollar of sales compared with the industry average. You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play 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 $300,000 each. You’ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $765,000. 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’ financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) Data Collected (in dollars) Like Games Our Play Industry Average Accounts receivable 8,100 11,700 11,550 Net fixed assets 165,000 240,000 650,250 Total assets 285,000 375,000 703,800 C) Using this information, complete the following statements to include in your analysis. 1. Our Play has days of sales tied up in receivables, which is much than the industry average. It takes Our Play time to collect cash from its customers 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 fixed 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 averag

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Question

A) Over the past year, how often did Crockett Electronics sell and replace its inventory?

2.86x

16.42x

8.01x

14.93x

B) The inventory turnover ratio across companies in the electronics industry is 12.6905x. Based on this information, which of the following statements is true for Crockett Electronics?

Crockett Electronics is holding less inventory per dollar of sales compared with the industry average.

Crockett Electronics is holding more inventory per dollar of sales compared with the industry average.

You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play 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 $300,000 each. You’ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $765,000. 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’ financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.)

Data Collected (in dollars)

	Like Games	Our Play	Industry Average
Accounts receivable	8,100	11,700	11,550
Net fixed assets	165,000	240,000	650,250
Total assets	285,000	375,000	703,800

C) Using this information, complete the following statements to include in your analysis.

1.	Our Play has days of sales tied up in receivables, which is much than the industry average. It takes Our Play time to collect cash from its customers 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 fixed 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.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 6 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.