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Compute Inventory Turn over 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. 20000

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Stock Turn over Ratio = \(\frac {\textit{Cost of goods sold}}{\textit{Average Stock}} \)

Cost of Goods sold = Net Sales – Gross Profit

= 2,00,000 – 50,000= 1,50,000 Opening Stock 

= Closing Stock – 20,000 = 60,000 – 20,000 

= 40,000

Average Stock = Opening Inventory + Closing inventory/2

Average Inventory 

\frac{40,000+60,000}{2}=\frac{1,00,000}{2} = 50,000
Stock turnover ratio 

\frac{1,50,000}{50,000}=\frac{3}{1} 

= 3 times

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