Question

Find Inventory Turnover Ratio : Op.Stock Rs.90000, Purchases Rs.270000 & Cl. Stock Rs. 110000​

Answer 1

Answer:

2.5 times

Explanation:

Inventory Turnover Ratio = ( cost of goods sold) / average stock

= 250000 / 100000

= 2.5 times

Where,

Cost of goods sold = opening stock + purchases + direct expenses - closing stock

= 90000 + 270000 + 0 - 110000

= 250000

Average stock = (opening stock + closing stock) / 2

= (90000 + 110000) /2

= 200000 / 2

= 100000

Hope it will help. Thank you

Answer 2

Calculation of cost of goods sold:

Explanation:

Given:

Opening stock = 90,000

Closing Stock = 110,000

Purchase = 270,000

Computation of Cost of goods sold:

Cost of goods sold = Opening stock + Purchase - Closing Stock

Cost of goods sold = 90,000 + 270,000 - 110,000

Cost of goods sold = 250,000

Computation of Inventory Turnover Ratio:

Inventory Turnover Ratio = Cost of goods sold / Average Stock

Inventory Turnover Ratio = Cost of goods sold / [(Opening stock+Closing Stock) / 2]

Inventory Turnover Ratio = 250,000 / 100,000

Inventory Turnover Ratio = 2.5 times

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