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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Cost of Revenue from Operations (Cost of Goods Sold) ₹5,00,000; Purchases ₹5,50,000; Opening Inventory ₹1,00,000. Calculate the Inventory Turnover Ratio.
Cost of Goods Sold = Opening Inventory + Purchases − Closing Inventory
5,00,000 = 1,00,000 + 5,50,000 − Closing Inventory
Closing Inventory = ₹1,50,000
Average Stock = (Opening Stock + Closing Stock) ÷ 2 = (1,00,000 + 1,50,000) ÷ 2 = ₹1,25,000
Inventory Turnover Ratio = Cost of Goods Sold ÷ Average Stock = 5,00,000 ÷ 1,25,000 = 4 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.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.80 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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