From the following information, calculate inventory turnover ratio; Revenue from Operations (Sales) Rs. 16,00,000; Average Inventory Rs. 2,20,000; Gross Loss Ratio 5%.

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Solution

Inventory Turnover Ratio $= \frac{Cost of Revenue from Operations}{Average Inventory}$

Cost of Revenue from Operations = Revenue from Operations + Gross loss

Rs. 16,00,000 + Rs. 80,000 = Rs. 16,80,000

Inventory Turnover Ratio = $\frac{R s . 16, 80, 000}{R s . 2, 20, 000} = 7.64 t i m e s$

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Q. From the following information, calculate Inventory Turnover Ratio:

	₹
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Average Inventory	2,20,000
Gross Loss Ratio 5%

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From the following information, calculate inventory turnover ratio; Revenue from Operations (Sales) Rs. 16,00,000; Average Inventory Rs. 2,20,000; Gross Loss Ratio 5%.

Inventory Turnover Ratio =Cost of Revenue from OperationsAverage Inventory Cost of Revenue from Operations = Revenue from Operations + Gross loss Rs. 16,00,000 + Rs. 80,000 = Rs. 16,80,000 Inventory Turnover Ratio = Rs.16,80,000Rs.2,20,000=7.64 times

Inventory Turnover Ratio $= \frac{Cost of Revenue from Operations}{Average Inventory}$

Cost of Revenue from Operations = Revenue from Operations + Gross loss

Rs. 16,00,000 + Rs. 80,000 = Rs. 16,80,000

Inventory Turnover Ratio = $\frac{R s . 16, 80, 000}{R s . 2, 20, 000} = 7.64 t i m e s$