From the following information, calculate inventory turnover ratio:
Revenue from operations = ₹4,00,000
Average Inventory = ₹55,000
Gross Profit Ratio = 10%
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 6.55 times
Inventory turnover ratio = cost of revenue from operations ÷ average inventory
Gross profit = 10% of ₹4,00,000 = ₹40,000
Cost of revenue from operations = ₹4,00,000 − ₹40,000 = ₹3,60,000
Inventory turnover ratio = ₹3,60,000 ÷ ₹55,000 = 6.55 times
NCERT (2026-27 edition):
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