Access the 2006 annual 10-K report for Oakley, Inc. (Ticker OO), filed on March 9, 2007, from
Question:
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.
Required
1. What product does Oakley sell that is especially popular with college students?
2. What inventory method does Oakley use?
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.
Step by Step Answer:
1 One especially popular product with college students that Oakley sells is Oakle...View the full answer
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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