Question

Opening stock 29000; purchase 242000; sales 320000; gross profit 25% of sale . stock turnover ratio will be ????

Answer 1

Answer:

31 : 320

Explanation:

Answer 2

Stock turnover ratio = 8 times

Explanation:

Given:

Opening Stock = 29,000

Purchase = 2,42,000

Net sales = 3,20,000

Gross profit rate = 25% (On Sales)

Calculation of Cost of goods sold :

Sales = Cost of Goods sold + Gross Profit

3,20,000 = Cost of goods sold + 25% (sales)

3,20,000 = Cost of goods sold + 80,000

3,20,000 - 80,000 = Cost of goods sold

2,40,000 = Cost of goods sold

Cost of goods sold = Opening Inventory + Purchase - Closing inventory

2,40,000 = 29,000 + 2,42,000 - Closing inventory

Closing inventory = 31,000

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

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

= 30,000

Inventory turn over ratio = Cost of goods sold / Average inventory

= 2,40,000 / 30,000

= 8 times

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