Based on following information of a company as at 31 March, 2017. Answer question.
|
Items |
Rs. |
|
Inventory |
1,00,000 |
|
Total Current Assets |
1,60,000 |
|
Shareholders Fund |
4,00,000 |
|
13% Debentures |
3,00,000 |
|
Current liabilities |
1,00,000 |
|
Net Profit before Tax |
3,51,000 |
|
Cost of Revenue from operations |
5,00,000 |
The Inventory Turnover Ratio will be:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 5 times
Inventory Turnover Ratio = Cost of Revenue from Operations / Average Inventory
= 5,00,000 / 1,00,000
= 5 times
Note: In absence of information regarding ‘Inventory in the beginning’ and ‘Inventory at the end’, the ‘Inventory’ is treated as Average Inventory.