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Question 38 Chapter 14 of Class 12 Part – 2 – 2024
III. Activity Ratios
Inventory Turnover Ratio
38. (Inventory T/O Ratio) From the following details, calculate the stock turnover ratio
| Cost of goods sold (i.e. Cost of Revenue from Operation) | 4,50,000 |
| Inventory at the beginning of the year | 1,25,000 |
| Inventory at the close of the year | 1,75,000 |
| Inventory Turnover Ratio | = | Cost of goods sold |
| Average Inventory |
| Cost of goods sold | = | Net Total Sales – Gross profit |
| = | ₹ 4,50,000 |
| Debt Equity Ratio | = | Opening Inventory – Closing Inventory |
| 2 | ||
| = | ₹ 1,25,000 + ₹ 1,75,000 | |
| 2 | ||
| = | ₹ 1,50,000 |
| Inventory Turnover Ratio | = | ₹ 4,50,000 |
| ₹ 1,50,000 | ||
| = | 3 Times |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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