Question

what is the formula of inventory ratio in accountancy

Answer 1

Hi friend,

The inventory Turnover ratio is an efficiency ratio that shows how effectively inventory managed by comparing cost of good sold or cost of Revenue from operations with Avg. Inventory for a period..

✔Please see the attachment.....

➡ Avg. Inventory = Opening + closing / 2

....i hope it helps you

Answer 2

In accounting, the Inventory turnover is a measure of the number of times inventory is sold or used in a time period such as a year. ... The equation for inventory turnover equals the cost of goods sold divided by the average inventory.