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Question
Following figures have been extracted from Shivalika Mills Ltd.
Inventory at the end of the year ₹ 1,00,000.
Inventory Turnover Ratio 8 times.
Selling price 25% above cost.
Solution
Average Inventory
= `("Opening Inventory + Closing Inventory")/2`
`= (60000 + 100000)/2 = 80000`
Inventory Turnover Ratio=`"Cost of goods Sold"/"Average Inventory"`
`8 = "Cost of goods Sold"/80000`
Cost of goods Sold = Rs 640000
Gross Profit = 25% on Cost
∴ Gross Profit =`640000 xx 25/100 = 160000`
Sales = Cost of Goods Sold + Gross Profit
= 6,40,000 + 1,60,000 = 8,00,000
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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:
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|
Rs |
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Revenue from Operations |
25,20,000 |
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Net Profit |
3,60,000 |
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Cast of Revenue from Operations |
19,20,000 |
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Long-term Debts |
9,00,000 |
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Trade Payables |
2,00,000 |
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Average Inventory |
8,00,000 |
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Current Assets |
7,60,000 |
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Fixed Assets |
14,40,000 |
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Current Liabilities |
6,00,000 |
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8,00,000 |
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Particulars |
₹ |
Particulars |
₹ | ||
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Capital Employed |
50,00,000 |
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35,00,000 | ||
|
Current Liabilities |
20,00,000 |
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10,00,000 | ||
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| Trade Receivable | 4,00,000 | Surplus, i.e., Balance in Statement of Profit and Loss | 2,00,000 | ||
| Cash and Cash Equivalents | 5,00,000 | ||||
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Investment (Trade) |
1,00,000 |
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|||
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