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Question
From the following information, calculate Inventory Turnover Ratio (up to two decimal places):
| Particulars | ₹ |
| Opening Inventory | 20,000 |
| Closing Inventory | 2,00,000 |
| Revenue from Operations | 7,00,000 |
| Gross Loss | 70,000 |
Numerical
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Solution
Cost of Revenue from Operations = Revenue from Operations + Gross Loss
= ₹ 7,00,000 + ₹ 70,000
= ₹ 7,70,000
Average Inventory = `(₹ 20,000 + ₹ 2,00,000)/2`
= ₹ 1,10,000
Inventory Turnover Ratio = `(₹ 7,70,000)/(₹ 1,10,000)`
= 7 times
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