Question

If the cost of goods sold is Rs.1,00,000 the value of the opening stock is Rs.20,000 and that of closing stock is Rs. 80,000, the stock turnover ratiowould be​

Answer 1

Explanation:

Stock Turnover Ratio = COGS / Average Inventory

COGS is Rs.1,00,000

Average Inventory = Opening stock + Closing stock/2

= 20,000 + 80,000 /2

= 1,00,000/2

= 50,000

Average Inventory = 50,000

Stock Turnover Ratio = COGS / Average Inventory

= 1,00,000/50,000

= 2

Stock Turnover Ratio = 2 times

Therefore,Stock Turnover Ratio = 2 times

Answer 2

Answer:

Stock Turnover Ratio will  be  2  times.

Explanation:

Solution :

The Stock Turnover Ratio :

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

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

$\sf{\longrightarrow{\dfrac{1,00,000}{ \frac{Ope.ning \: Stock \: + \: Closing \: Stock}{2}}}}$

★ Average Inventory =

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

$\sf{\longrightarrow{\dfrac{20,000 \: + \: 80,000}{2}}}$

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

$\longrightarrow \: 50,000$

Average Inventory = 50,000

★ The Stock Turnover Ratio =

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

$\longrightarrow{\sf{\dfrac{1,00,000 }{50,000} \: = \: 2}}$

Inventory Turnover Ratio = 2 times

∴  Stock Turnover Ratio will  be  2  times .