Question

From the following information, calculate inventory turnover ratio:

Revenue from operations – 4,00,000/-
Average Inventory – 55,000/-
Gross Profit Ratio – 10%

Answer 1

Cost of Revenue from Operations = 4,00,000 – 40,000
= ₹ 3,60,000

Inventory Turnover Ratio = 3,60,000/55,000
= 6.54 times.