Question : Opening Inventory Rs.29,000; Closing Inventory Rs.31,000; Revenue from Operations (Sales) Rs.3,20,000; Gross Profit Ratio 25% on Revenue from Operations.
Inventory Turnover Ratio will be
Option 1: 6 times
Option 2: 4 times
Option 3: 8 times
Option 4: None of the above
Correct Answer: 8 times
Solution : Answer = 8 times
Inventory Turnover
$\mathrm{Ratio}=\frac{\text{Cost of goods Sold}}{\text{Average Inventory}}$ $\Rightarrow \quad \frac{2,40,000}{30,000}=8 \text { times }$
Cost of goods sold
= Sales - G. P
= 3,20,000 - 80,000
= 2,40,000
Average Inventory = $\frac{29000+31000}{2}$
= 60,000/2 = 30,000 Hence, the correct option is 3.
Question : Opening Inventory Rs.28,000
Closing Inventory Rs.52,000
Revenue from Operations (Sales) Rs.6,00,000
Gross Profit 25% on the cost of revenue from operations
The inventory turnover ratio will be ………
Option 1: 8 times
Option 2: 2.4 times
Option 3: 1.2 times
Option 4: 12 times
Question : Revenue from Operations (Sales) Rs. 16,00,000; Average Inventory Rs.2,20,000; Gross Loss Ratio 5%. Inventory turnover ratio will be
Option 1: 7.63 times
Option 2: 7 times
Option 3: 7.4
Question : _____________ratio establishes a relationship between gross profit and Revenue from Operations, i.e. Net Sales.
Option 1: Net profit ratio
Option 2: Operating profit ratio
Option 3: Gross profit ratio
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