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The correct answer is GD Products collects receivables more quickly than AP Goods.
Analysts typically utilize the fixed asset turnover ratio (FAT) to gauge operating performance. This efficiency ratio assesses a company's capacity to generate net sales from its fixed-asset investments, specifically property, plant, and equipment (PP&E). It compares net sales (income statement) to fixed assets (balance sheet) (PP&E). Utilized as a net of accumulated depreciation is the fixed asset balance. A greater fixed asset turnover ratio shows that a business has utilized fixed asset investments to drive sales effectively. A greater ratio suggests that management is making better use of its fixed assets. No information can be gleaned from a high FAT ratio about a company's capacity to produce reliable earnings or cash flows.
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