Advertisements
Advertisements
Question
Read the following information and answer the given question:
| Year | 2020 | 2019 | 2018 |
| Amount | (in ₹) | (in ₹) | (in ₹) |
| Outstanding Expenses | 50,000 | 40,000 | 25,000 |
| Prepaid Expenses | 3,00,000 | 2,50,000 | 3,50,000 |
| Trade Payables | 18,00,000 | 16,00,000 | 14,00,000 |
| Inventory | 12,00,000 | 10,00,000 | 11,00,000 |
| Trade Receivables | 11,00,000 | 8,00,000 | 10,00,000 |
| Cash in hand | 17,00,000 | 12,00,000 | 15,00,000 |
| Revenue from operations | 24,00,000 | 18,00,000 | 20,00,000 |
| Gross Profit Ratio | 12% | 15% | 18% |
Inventory turnover ratio for the year 2020 will be ______. (Choose the correct alternative)
Options
1.62 times
1.82 times
1.55 times
1.92 times
MCQ
Fill in the Blanks
Solution
Inventory turnover ratio for the year 2020 will be 1.92 times.
Explanation:
Inventory turnover ratio = `"Cost of revenue from operations"/"Average Inventory"`
`= (₹ 24,00,000 - ₹ 2,88,000)/(11,00,000)`
`= (₹ 21,12,000)/(₹ 11,00,000)`
= 1.92 times
Gross Profit Ratio = `"Gross Profit"/"Revenue from Operationas"`
Gross Profit = 12% of ₹ 24,00,000
= ₹ 2,88,000
shaalaa.com
Types of Ratios
Is there an error in this question or solution?
