From the following information calculate Inventory Turnover Ratio: Revenue from Operation Rs. 16,00,000, Average Inventory Rs. 2,20,000, Gross Loss Ra
From the following information calculate Inventory Turnover Ratio: Revenue from Operation Rs. 16,00,000, Average Inventory Rs. 2,20,000, Gross Loss Ratio 5%.
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Inventory Turnover Ratio = `("Cost of Revenue from Operations")/("Average Inventory")`
`= (Rs. 16,80,000)/(Rs. 2,20,000)` = 7.64 Times.
Working Note:
Cost of Revenue from Operations = Revenue from Operations + Gross Loss
= Rs. 16,00,000 + Rs. 80,000 (i.e., 5% of Rs. 16,00,000) = Rs. 16,80,000.
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