The country Road has its office in Richmond, Victoria. The Country Road brand, an iconic Australian label launched in 1974. It is engaged in the design, sourcing, retailing, licensing and wholesale distribution of quality lifestyle products.
Obtain the 2010 annual reports or financial statements and answer the following questions using the consolidated balances.
i. How much was the Country Roads inventory at year ended 30 June 2010?
ii. How does Country Roads value its inventories? Which cost method does the company used?
iii. If Country Roads wants to show the highest Gross Profit when inventory costs are raising, which inventory system will they have to use? Which system will provide the lowest Gross Profit?
iv. What was the proportion of inventories to total current assets? What was the proportion of inventories to total assets?
v. Calculate the Current ratio, Debt ratio and Inventory turnover ratio.
vi. Comment about the performance of Country Road in 2010 compared to 2009 based on these three ratios.