Outer Reaches, Inc. is a leading ï¬rm in the aerospace and defense industries. The following selected ï¬nancial

Question:

Outer Reaches, Inc. is a leading ï¬rm in the aerospace and defense industries. The following selected ï¬nancial data (in millions) are for three years. The company€™s ï¬scal year-end is September 30.

Required:
(a) Compute the inventory turnover ratio and age of inventory for Outer Reaches, Inc. for each of the years listed. The company€™s inventory balance at the beginning of 2007 was $153 million.
(b) Would you expect companies in the aerospace and defense industries to normally have high or low inventory turnover ratios? Explain the rationale for your answer.
(c) Did Outer Reaches, Inc.€™s inventory ratios improve or deteriorate between 2007 and 2009? Explain.

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...