Question

2.If opening inventory is 60000, cost
of revenue from operation is 500000
and inventory turnover ratio is 5
times then the closing inventory will
be *​

Answer 1

Stock turnover ratio = Cost of goods sold/ average inventory

Cost of goods sold = Rs.2,20,000

Average Inventory= [Opening inventory + Closing Inventory]/2

= [50000+60000] / 2

= Rs.55000

Now,

Stock turnover ratio = 220000/55000

= 4 times.