Calculate:1. Inventory turnover ratio 2. Trade receivable turnover ra

1.	Calculate:1. Inventory turnover ratio 2. Trade receivable turnover ratio 3. Trade payable turnover ratio and 4. Fixed assets turnover ratio from the following information obtained from Delphi Ltd.Additional information: 1. Revenue from operations for the year Rs. 10,50,000 2. Purchases for the year Rs. 4,50,000 3. Cost of revenue from operations Rs. 6,00,000. Assume that sales and purchases are for credit.
Answer» 1. Inventory turnover ratio = (Cost of revenue from operations)/(Average inventory) Average inventory = ((Opening + Closing) inventory)/2 = (3,60,000 + 4,40,000)/2 = 4,00,000 Inventory turnover ratio = 16,00,000/4,00,000 = 4 times 2. Trade receivables turnover ratio = (Revenue from operation)/(Average trade receivable) = Average trade receivable = (7,40,000 + 6,60,000)/2 = 7,00,000 Trade receivables turnover ratio = 35,00,000/7,00,000 = 5 times 3. Trade payable turnover ratio = (Credit purchases)/(Average trade payble) Average trade receivable = (1,90,000 + 2,30,000)/2 = 21,00,000 Trade payable turnover ratio = 21,00,000/2,10,000 = 10 times 4. Fixed assets turnover ratio = (Revenue form operations)/(Average fixed assets) Average fixed assets = (6.00.000 + 8,00,000)/2 .= 7,00,000 Fixed assets turnover ratio = 35,00,000/7,00,000 = 5 times

Calculate:1. Inventory turnover ratio 2. Trade receivable turnover ratio 3. Trade payable turnover ratio and 4. Fixed assets turnover ratio from the following information obtained from Delphi Ltd.Additional information: 1. Revenue from operations for the year Rs. 10,50,000 2. Purchases for the year Rs. 4,50,000 3. Cost of revenue from operations Rs. 6,00,000. Assume that sales and purchases are for credit.

Answer»

1. Inventory turnover ratio = (Cost of revenue from operations)/(Average inventory)

Average inventory = ((Opening + Closing) inventory)/2

= (3,60,000 + 4,40,000)/2

= 4,00,000

Inventory turnover ratio = 16,00,000/4,00,000

= 4 times

2. Trade receivables turnover ratio = (Revenue from operation)/(Average trade receivable)

= Average trade receivable = (7,40,000 + 6,60,000)/2

= 7,00,000

Trade receivables turnover ratio = 35,00,000/7,00,000

= 5 times

3. Trade payable turnover ratio = (Credit purchases)/(Average trade payble)

Average trade receivable = (1,90,000 + 2,30,000)/2

= 21,00,000

Trade payable turnover ratio = 21,00,000/2,10,000

= 10 times

4. Fixed assets turnover ratio = (Revenue form operations)/(Average fixed assets)

Average fixed assets = (6.00.000 + 8,00,000)/2

.= 7,00,000

Fixed assets turnover ratio = 35,00,000/7,00,000

= 5 times