Question

Ratio Analysis
4.107
From the following information, calculate Inventory Turnover Ratio:
Revenue from Operations
11.
Average Inventory
Gross Loss Ratio 5%.
₹
16,00,000
2,20,000
2 From the following info​

Answer 1

Explanation:

Revenue from Operations = 16,00,000

Gross Loss Ratio 5%.

Average Inventory = 2,20,000

Gross Loss =

$\frac{gross \: loss}{revenue \: from \: operations}$

$5\% \: = \: \frac{gross \: loss}{1600000}$

= 0.05 × 16,00,000

= 80,000

Cost of Revenue from Opreations = Revenue from Operations + Gross loss

= 16,00,000 + 80,000

= 16,80,000

Inventory Turnover Ratio:

$\frac{cost \: of \: revenue \: from \: operations}{average \: inventory}$

$\frac{16,80,000}{2,20,000}$

= 7.64

Inventory Turnover Ratio: = 7.64 Times

Therefore, Inventory Turnover Ratio: = 7.64 Times

Answer 2

Answer:

Inventory Turnover Ratio = 7.64 times

Explanation:

★ Appropriate Question :

From the following information, calculate Inventory Turnover Ratio:

Revenue from Operations - ₹ 16,00,000

Average Inventory - 2,20,000

Gross Loss Ratio 5%.

Solution :

Revenue from Operations - ₹ 16,00,000

Average Inventory - 2,20,000

Gross Loss Ratio 5%.

Inventory Turnover Ratio: = ??

★ Inventory Turnover Ratio:

$\sf{\dfrac{Cost \: Of \: Revenue \: from \: Operations}{Average \: Inventory}}$

★ Cost of Revenue from Opreations = Revenue from Operations + Gross loss

Revenue from Operations = 16,00,000

Gross Loss Ratio 5%.

Gross Loss Ratio =

$\sf{\longrightarrow{\dfrac{Gross \: Loss}{Revenue \: from \: Operations}}}$

$\sf{\longrightarrow{5\% \: = \: \dfrac{Gross \: Loss}{16,00,000}}}$

$\sf{\longrightarrow{16000\times 5 = Gross Loss}}$

$\longrightarrow$ 80,000 = Gross Loss

Gross Loss = 80,000

★ Cost of Revenue from Opreations = Revenue from Operations + Gross loss

16,00,000 + 80,000

Cost of Revenue from Opreations = 16,80,000

Inventory Turnover Ratio:

$\sf{\longrightarrow{\dfrac{Cost \: of \: Revenue \: from \: Operations}{Average \: Inventory}}}$

$\sf{\longrightarrow{\dfrac{16,80,000}{2,20,000}}}$

$\longrightarrow$ 7.64

Inventory Turnover Ratio: = 7.64 times

∴ Inventory Turnover Ratio = 7.64 times.