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Question
Compute Stock Turnover Ratio from the following information:
|
|
Rs |
|
Net Revenue from Operations |
2,00,000 |
|
Gross Profit |
50,000 |
|
Inventory at the end |
60,000 |
|
Excess of inventory at the end over inventory in the beginning |
20,000 |
Solution
`"Inventory Turnover Ratio" = "Cost of goods sold"/"Average Inventory"`
`"Cost of goods sold" = "Net Sales" - "Gross Profit"`
= `2,00,000 - 50,000`
= `1,50,000`
`"Inventory in the begining" = "Inventory at the end" - "20,000"`
= `60,000 - 20,000`
= `40,000`
`"Average Inventory" = ("Inventory in the begining" + "Inventory at the end")/2`
= `(40,000 + 60,000)/2`
= `50,000`
`"Inventory turnover ratio" = "1,50,000"/"50,000" = 3 "times"`
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RELATED QUESTIONS
From the following information calculate:
(i) Gross Profit Ratio (ii) Inventory Turnover Ratio (iii) Current Ratio (iv) Liquid Ratio (v) Net Profit Ratio (vi) Working capital Ratio:
|
|
Rs |
|
Revenue from Operations |
25,20,000 |
|
Net Profit |
3,60,000 |
|
Cast of Revenue from Operations |
19,20,000 |
|
Long-term Debts |
9,00,000 |
|
Trade Payables |
2,00,000 |
|
Average Inventory |
8,00,000 |
|
Current Assets |
7,60,000 |
|
Fixed Assets |
14,40,000 |
|
Current Liabilities |
6,00,000 |
|
Net Profit before Interest and Tax |
8,00,000 |
From the following information calculate Gross Profit Ratio, Inventory Turnover Ratio and Trade Receivables Turnover Ratio.
| Rs | |
| Revenue from Operations | 3,00,000 |
| Cost of Revenue from Operations | 2,40,000 |
| Inventory at the end | 62,000 |
| Gross Profit | 60,000 |
| Inventory in the beginning | 58,000 |
| Trade Receivables | 32,000 |
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| ₹ | ₹ | |||
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| Non-current Investments | 10,000 | Long-term Loans and Advances | 40,000 | |
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| 1st April, 2018 ₹ |
31st March, 2019 ₹ |
|
| Sundry Creditors | 1,50,000 | 4,50,000 |
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"Payment of dividend."
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| Particulars | ₹ |
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| Cost of Revenue from Operations | 9,00,000 |
| Operating Expenses | 15,000 |
| Inventory | 20,000 |
| Other Current Assets | 2,00,000 |
| Current Liabilities | 75,000 |
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| Statement of Profit and Loss (Dr.) | 47,500 |
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