Compute Stock Turnover Ratio From The Following Information: ACCOUNTING RATIO

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Compute Stock Turnover Ratio from the following information:

Net Revenue from OperationsRs. 2,00,000
Gross ProfitRs. 50,000
Inventory at the endRs. 60,000
Excess of inventory at the end over inventory in the beginningRs. 20,000



Stock turn over Ratio  


Cost of Good Sold = Net Sale - Gross Profit
                              = 2,00,000 - 50,000
                             = 1,50,000
Average Stock 


Opening Stock = Closing Stock - 20,000
                        = 60,000 - 20,000
                       = 40,000
Average Stock =  `\frac{40,000+60,000}{2}` 
                        =  `\frac{1,00,000}{2}`
                        = 50,000

Stock Turn Over Ratio = `\frac{1,50,000}{50,000}` = 3 times

Chapter-5 Accounting Ratios-II



Location: India

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