Inventory Turnover Ratio = (Cost of Goods Sold /Cost of Revenue from Operation)/Average Inventory
Cost of goods sold= Opening Stock + Net Purchases + Direct Expenses – Closing Stock
Cost of Revenue from Operations = Revenue from Operations – Gross Profit
Cost of Material Consumed (including direct expenses) + Change in inventories of WIP and Finished Goods
Opening Inventory + Net Purchases+ Direct Expenses – Closing inventory
Average Inventory = (Opening Inventory + Closing Inventory)/2
From the following information calculate inventory turnover ratio; Revenue from operations Rs.16,00,000; Average Inventory Rs.2,20,000; Gross Loss Ratio 5%.
The quick ratio of a company is 1.5: 1. A state with reason which of the following transactions would
ii. decrease or
iii. not change the ratio
a. Paid rent Rs 3,000 in advance.
b. Trade receivables included a debtor Shri Ashok who paid his entire amount due Rs 9,700.
From the following information obtained from the books of Kundan Ltd., calculate the inventory turnover ratio for the years 2015-16 and 2016-17 :
|Inventory on 31st March||7,00,000||17,00,000|
|Revenue from operations||50,00,000||75,00,000|
(Gross profit is 25% on the cost of revenue from operations)
In the year 2015-16, inventory increased by Rs 2,00,000.