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Question
From the following information, calculate Inventory Turnover Ratio:
| ₹ | |
| Revenue from Operations | 16,00,000 |
| Average Inventory | 2,20,000 |
| Gross Loss Ratio 5% |
Sum
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Solution
Cost of Revenue from Operations=Revenue from Operations+Gross Loss
=16,00,000 + 80,000 = Rs 16,80,000
Inventory Turnover Ratio
= `"Cost of Revenue from Operations"/"Average Inventory" = 1680000/220000 = 7.64` times
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