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Question
From the following Information, calculate Inventory Turnover Ratio:
Credit Revenue from Operations ₹ 3,00,000; Cash Revenue from Operations ₹ 1,00,000, Gross Profit 25% of Cost, Closing Inventory was 3 times the Opening Inventory. Opening Inventory was 10% of Cost of Revenue from Operations.
Solution
Average Inventory = `(30000 + 90000)/2 = 60000`'
Opening Inventory = 300000 × 10% = Rs 30000
Closing Inventory=30,000 × 3= Rs 90,000
Cost of Revenue from Operations=Revenue from Operations−Gross Profit
=4,00,000-1,00,000=Rs 3,00,000
Inventory Turnover Ratio
=`"Cost of Revenue from Operations"/"Average Inventory"`
`= 300000/60000` = 5 times
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|
|
Rs |
|
Total Assets |
15,00,000 |
|
Current Liabilities |
6,00,000 |
|
Total Debts |
12,00,000 |
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 |
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| Rs. | |
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| Revenue from Operations | 100,000 |
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| Trade Receivables | 27,500 |
| Cash and Cash Equivalents | 17,500 |
| Current Liabilities | 40,000 |
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| Particulars | Note No. | Rs. |
| I. Equity and Liabilities: | ||
| 1. Shareholders’ funds | ||
| a) Share capital | 10,00,000 | |
| b) Reserves and surplus | 9,00,000 | |
| 2. Non-current Liabilities | ||
| Long-term borrowings | 12,00,000 | |
| 3. Current Liabilities | ||
| Trade payables | 5,00,000 | |
| Total | 36,00,000 | |
| II. Assets | ||
| 1. Non-current Assets | ||
| a) Fixed assets | ||
| Tangible assets | 18,00,000 | |
| 2. Current Assets | ||
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| b) Trade Receivables | 9,00,000 | |
| c) Cash and cash equivalents | 5,00,000 | |
| Total | 36,00,000 |
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| Particulars | ₹ |
Particulars |
₹
|
||
| Total Assets | 15,00,000 | Bills Payable | 60,000 | ||
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20,000 |
||
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|
Particulars |
₹ |
||
|
Share Capital |
5,00,000 |
||
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|
Long-term Provision |
NIL |
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