Outer Reaches Inc is a leading rm in the aerospace
Outer Reaches, Inc. is a leading firm in the aerospace and defense industries. The following selected financial data (in millions) are for three years. The company’s fiscal 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.
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