Use the preceding information to complete the following statements.
1. BrainGames Inc. has days of sales tied up in receivables, which is much than the industry average. This means that BrainGames Inc. takes 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.