Question

from the following data ,calculate inventory turnover ratio cost of revenue from operations= 300000
purchases=330000
opening inventory =60000
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Answer 1

Answer:

Inventory Turnover Ratio =`("Cost of Revenue from operations")/("Average Inventroy")=(Rs 300000)/(Rs 75000)= 4 Times`

Cost of Revenue from operations(Cost of Goods sold)

=opening Inventory +Purchases + Direct Expenses -closing Inventory

Closing Inventory =Opening Inventory+ Inventory+ Purchses -Cost of Revenue

From opertions (Cost of Goods sold)

=Rs 60000+Rs 330000-Rs 300000=Rs 90000

Average Inventory `=("Opening Inventory+Closing Inventroy")/(2)`

`=(Rs 60000+Rs 90000)/(2)=Rs 75000`

Explanation:

Answer 2

$\sf\red{Cost \:of \:revenue \:from \: operations\:(cost \:of \:goods\: sold)= Opening\: Inventory + Purchases + Direct \: expenses - Closing\: Inventory }$

$\sf\red{Closing \: Inventory = Opening \: Inventory + Purchases - Cost \: of \: revenue \: from \: operations}$

$\implies$$\sf{60,000+3,30,000-3,00,000}$

$\implies$$\sf{₹90,000}$

$\sf\red{Average \: Inventory = \frac{(Opening \: inventory + Closing \: inventory)}{2}}$

$\implies$$\sf{\frac{(60,000 + 90,000)}{2} }$

$\implies$$\sf{₹75,000}$

$\sf\red{Inventory \: Turnover \: ratio = \frac{Cost \: of \: revenue \: from \: operations}{Average \: inventory} }$

$\implies$$\sf{\frac{3,00,000}{75,000} }$

$\implies$$\sf{4 \: times}$