Calculate Inventory Turnover Ratio if: Inventory in the beginning is Rs. 76,250, Inventory at the end is 98,500, Gross Revenue from Operations is Rs. 5,20,000:- ACCOUNTING RATIOS

Calculate Inventory Turnover Ratio if:

Inventory in the beginning is Rs. 76,250, Inventory at the end is 98,500, Gross Revenue from Operations is Rs. 5,20,000, Sales Return is Rs. 20,000, Purchases is Rs. 3,22,250.

Inventory Turnover Ratio 

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

= 76,250 + 3,22,250 - 98,500

= 3,00,000

Average Inventory 

 

= `\frac{72,250 + 98,000}{2 } `

= 87,375

Inventory Turn Over Ratio = `\frac{3,00,000}{87,375 } ` = 3.43 times

Chapter-5 Accounting Ratios-II

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