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From the following information calculate Inventory Turnover Ratio: Revenue from Operation Rs. 16,00,000, Average Inventory Rs. 2,20,000, Gross Loss Ratio 5%. |
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Answer» Inventory Turnover Ratio = `("Cost of Revenue from Operations")/("Average Inventory")` `= (Rs. 16,80,000)/(Rs. 2,20,000)` = 7.64 Times. Working Note: Cost of Revenue from Operations = Revenue from Operations + Gross Loss = Rs. 16,00,000 + Rs. 80,000 (i.e., 5% of Rs. 16,00,000) = Rs. 16,80,000. |
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