Question

Calculate inventory turn over ratio . Opening stock 29000 and closing stock 31000 revenue from operation 320000 and gross profit 33%

Answer 1

Explanation:

Check out the image attached.

Answer 2

Stock turnover ratio = 8 times

Explanation:

Given:

Opening Stock = 29,000

Closing stock = 31,000

Net sales = 3,20,000

Gross profit rate = 33% (On Cost)

Calculation of Cost of goods sold :

Sales = Cost of Goods sold + Gross Profit

3,20,000 = Cost of goods sold + 33% of (Cost of goods sold)

3,20,000 = Cost of goods sold + 0.33333 Cost of goods sold

3,20,000 = 1.33333 Cost of goods sold

2,40,000 = Cost of goods sold

Average inventory = (Opening Inventory + Closing inventory ) / 2

= (29,000 + 31,000) / 2

= 30,000

Inventory turn over ratio = Cost of goods sold / Average inventory

= 2,40,000 / 30,000

= 8 times

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