Calculate Inventory Turnover Ratio From The Data Given Below:- Accounting Ratios

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 Calculate Inventory Turnover Ratio from the data given below:

Inventory in the beginning of the yearRs. 10,000
Inventory at the end of the yearRs. 5,000
CarriageRs. 2,500
Revenue from OperationsRs. 50,000
PurchasesRs. 25,000




Inventory Turnover Ratio 


Cost of Revenue from Operations = Inventory in Begining + Purchase + Carriage - Inventory at the end

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

= 32,500

Average Inventory 



 
= `\frac{10,000 + 5,000}{2 } `

= 7,500

Inventory Turn Over Ratio = `\frac{32,500}{7,500 } ` = 4.33 times

Chapter-5 Accounting Ratios-II



Location: India

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