Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 24

Analyzing and Interpreting the Inventory Turnover Ratio
Polaris Industries Inc. is the biggest snowmobile manufacturer in the world. It reported the following amounts in its financial statements (in millions):

Required:
1. Calculate to one decimal place the inventory turnover ratio and average days to sell inventory for 2010, 2009, and 2008.
2. Comment on any trends, and compare the effectiveness of inventory managers at Polaris to inventory managers at its main competitor, Arctic Cat , where inventory turns over 3.6 times per year (101.4 days to sell). Both companies use the same inventory costing method (FIFO).