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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
Option 4: None of the above

Team Careers360 1st Jan, 2024

Answer (1)

Team Careers360 12th Jan, 2024

Correct Answer: 7.63 times

Solution : Answer = 7.63 times

$\text{Inventory Turnover Ratio}= \frac{\text{Cost of goods sold}}{\text{Average Inventor}}$

= 16,80,000/2,20,000

Cost of goods sold = Sales + G.loss

= 16,00,000 + 80,000

= 16,80,000

Hence, the correct option is 1.

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