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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Calculate the Inventory Turnover Ratio from the following:
| Particulars | Amount (₹) |
|---|---|
| Opening Inventory | 58,000 |
| Closing Inventory | 62,000 |
| Revenue from Operations, i.e., Sales | 6,40,000 |
| Gross Profit Ratio 25% | |
Gross Profit = 25% of 6,40,000 = ₹1,60,000
Cost of Goods Sold = Sales − Gross Profit = 6,40,000 − 1,60,000 = ₹4,80,000
Average Inventory = (58,000 + 62,000) ÷ 2 = ₹60,000
Inventory Turnover Ratio = Cost of Goods Sold ÷ Average Inventory = 4,80,000 ÷ 60,000 = 8 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.83 - 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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