Access the 2009 annual 10-K report for Polaris Industries (Ticker PII), filed on March 1, 2010, from
Question:
Required
1. What products are manufactured by Polaris?
2. What inventory method does Polaris use?
3. Compute its gross margin and gross margin ratio for the 2009 calendar year. Comment on your computations—assume an industry average of 27% for the gross margin ratio.
4. Compute its inventory turnover and days’ sales in inventory for the year ended December 31, 2009. Comment on your computations—assume an industry average of 5.9 for inventory turnover and 55 for days’ sales in inventory.
Step by Step Answer:
1 Polaris manufactures offroad vehicles such as all terrain vehicles ATV and snowmobil...View the full answer
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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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