Inventory turnover ratio
= Cost of Revenue from Operations / Inventory.

Opening Inventory

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Closing Inventory

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Average Inventory

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Total Inventory

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Solution

The correct option is C Average Inventory
Inventory turnover ratio = Cost of Revenue from Operations / Average Inventory. It indicates the number of times the stock turnes into sales during the accounting period.

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Similar questions

Q. Inventory Turnover Ratio = Cost of Revenue from Operations / ______________.

Calculate Inventory Turnover Ratio from the following particulars :

Cost of Revenue from Operations (Cost of Goods Sold) Rs. 6,40,000

Gross Profit 20% on Sales

Closing Inventory : 4 times of Opening Inventory

Opening Inventory : 10% of Cost of Revenue from Operations.

Q. (i) Revenue from Operations: Cash Sales ₹4,20,000; Credit Sales ₹6,00,000; Return ₹20,000. Cost of Revenue from Operations or Cost of Goods Sold ₹8,00,000. Calculate Gross Profit Ratio.
(ii) Average Inventory ₹1,60,000; Inventory Turnover Ratio is 6 Times; Selling Price 25% above cost. Calculate Gross Profit Ratio.
(iii) Opening Inventory ₹1,00,000; Closing Inventory ₹60,000; Inventory Turnover Ratio 8 Times; Selling Price 25% above cost. Calculate Gross Profit Ratio.

Q. From the following Information, calculate Inventory Turnover Ratio:
Credit Revenue from Operations ₹ 3,00,000; Cash Revenue from Operations ₹ 1,00,000, Gross Profit 25% of Cost, Closing Inventory was 3 times the Opening Inventory. Opening Inventory was 10% of Cost of Revenue from Operations.

Opening Inventory Rs. 29,000; Closing Inventory Rs. 31,000; Revenue from Operations (Sales) Rs. 3,20,000; Gross Profit Ratio 25% on Revenue from Operations.
Calculate:
(i) Inventory Turnover Ratio and
(ii) Average Age of Inventory.

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Inventory turnover ratio = Cost of Revenue from Operations / Inventory.

The correct option is C Average InventoryInventory turnover ratio = Cost of Revenue from Operations / Average Inventory. It indicates the number of times the stock turnes into sales during the accounting period.

Inventory turnover ratio
= Cost of Revenue from Operations / Inventory.

The correct option is C Average Inventory
Inventory turnover ratio = Cost of Revenue from Operations / Average Inventory. It indicates the number of times the stock turnes into sales during the accounting period.