Question

Calculate stock turnover ratio.

opening stock 40,000
closing stock 60,000
sales 400,000
gross profit 1 00,000​

Answer 1

Explanation:

COGS = Sales - Gross profit

=> 4,00,000 - 1 ,00,000

=> 3,00,000

COGS = 3,00,000

Average Inventory = Opening Stock+Closing Stock/2

=> 40,000 + 60,000/2

=> 1,00,000/2

=> 50,000

Stock turnover ratio =

Cost of Goods Sold/ Average Inventory

=> 3,00,000/50,000

=> 6

Stock turnover ratio = 6 times

Hence, Stock turnover ratio = 6 times.

Answer 2

Answer:

Stock Turnover Ratio will  be  6  times.

Explanation:

Solution :

★ The Stock Turnover Ratio :

$\sf{\longrightarrow{\dfrac{Cost \: Of \: Goods \: Sold}{Average \: Inventory}}}$

Net Sales = Cost Of Goods Sold + Gross Profit

$\longrightarrow$ 4,00,000 = Cost Of Goods Sold + 1,00,000

$\longrightarrow$ 4,00,000 - 1,00,000 = Cost Of Goods Sold

3,00,000 = Cost Of Goods Sold

$\sf{\longrightarrow{\dfrac{Cost\:Of \: Goods \: Sold}{ \frac{Ope.ning \: Stock \: + \: Closing \: Stock}{2}}}}$

$\sf{\longrightarrow{\dfrac{3,00,000}{\frac{Ope.ning \: Stock \: + \: Closing \: Stock}{2}}}}$

★ Average Inventory =

$\sf{\longrightarrow{\dfrac{Ope.ning \: Stock \: + \: Closing \: Stock}{2}}}$

$\sf{\longrightarrow{\dfrac{40,000 \: + \: 60,000}{2}}}$

$\sf{\longrightarrow{\dfrac{1,00,000}{2}}}$

$\longrightarrow \: 50,000$

★ The Stock Turnover Ratio =

$\sf{\longrightarrow{\dfrac{Cost\:Of \: Goods \: Sold}{Average \: Inventory}}}$

$\longrightarrow{\sf{\dfrac{3,00,000 }{50,000} \: = \: 6}}$

Stock Turnover Ratio = 6 times

∴  Stock Turnover Ratio will  be  6  times .