Compute Stock Turnover Ratio From The Following Information: ACCOUNTING RATIO

Compute Stock Turnover Ratio from the following information:

Net Revenue from Operations	Rs. 2,00,000
Gross Profit	Rs. 50,000
Inventory at the end	Rs. 60,000
Excess of inventory at the end over inventory in the beginning	Rs. 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

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