Access the 2006 annual 10-K report for Oakley, Inc. (Ticker OO), filed on March 9, 2007, from the EDGAR filings at www.SEC.gov.
1. What product does Oakley sell that is especially popular with college students?
2. What inventory method does Oakley use? (Hint: See the notes to its financial statements.)
3. Compute Oakley’s gross margin and gross margin ratio for the 2006 calendar year. Comment on your computations—assume an industry average of 35% for the gross margin ratio.
4. Compute Oakley’s inventory turnover and days’ sales in inventory for the year ended December 31, 2006. Comment on your computations—assume an industry average of 3.9 for inventory turnover.