Determine stock turnover ratio if, Opening stock is Rs 31,000, Closing stock is Rs 29,000, Sales is Rs 3,20,000 and Gross profit ratio is 25% on sales.

The correct option is B - 8 times

Inventory turnover ratio = $\frac{\text{Cost of goods sold}}{\text{Avg Inventory}}$

Here, gross profit ratio = 25% on sales.

Gross profit = Rs. 3,20,000 x 25% = Rs. 80,000

Cost of goods sold = sales - gross profit

Rs. 3,20,000 - Rs. 80,000 = Rs 2,40,000

Avg inventory = $\frac{(31,000+29,000)}{2}=30,000$

Inventory turnover ratio = $\frac{2,40,000}{30,000}$ = 8 Times