Question

Calculate inventory turnover ratio from the following:
Opening inventory ₹ 29000
Closing inventory ₹ 31000
Revenue from operation,i.e., sales ₹ 320000
Gross profit ratio 25%

Answer 1

Answer:

operational expenses=Rs.242000

Answer 2

8 Times

Explanation:

Inventory Turnover Ratio = Cost of Gods sold / Average inventory

= 2,40,000 / 30000

= 8 Times

Computation:

Calculation of Cost of goods sold = Revenue from Operation - Gross Profit

= 3,20,000 - (3,20,000 x 25%)

= 3,20,000 - 80,000

= 2,40,000

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

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

                               = 30,000

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