Calculate Inventory Turnover Ratio from the data given below: Rs Inventory in the beginning of the year 10,000 Inventory at the end of the year 5,000 Carriage 2,500 Revenue from Operations 50,000 Purchases 25,000

Calculate Inventory Turnover Ratio from the Data Given Below: - Accountancy

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Calculate Inventory Turnover Ratio from the data given below:

	Rs
Inventory in the beginning of the year	10,000
Inventory at the end of the year	5,000
Carriage	2,500
Revenue from Operations	50,000
Purchases	25,000

`"Inventory turnover ratio" = "Cost of Revenue from operations"/"Average Inventor"`

`"Cost of revenue from operations" = "Inventory in the begining + Purchases + Carriage - Inventory at the end"`

=`10,000 + 25,000 + 2,500 - 5,000`

=`32,500`

`"Average Inventory" = "Inventory in the begining + Inventory at the end"/2`

= `(10,000 + 5,000)/2`

= `7,500`

`"Inventory Turnover Ratio" = "32,500"/"7,500" = 4.33 "times"`

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Chapter 5 Accounting Ratios
Numerical Questions | Q 14 | Page 231