From the following information, calculate inventory turnover ratio:

Revenue from operations = ₹4,00,000
Average Inventory = ₹55,000
Gross Profit Ratio = 10%

6.55 times

The correct answer is Option (3) - 6.55 times.

Gross profit ratio = 10%
Gross profit ratio = Gross profit/ Revenue from operations x 100
                    10  = Gross profit/4,00,000 x 100
Gross profit = 10 x 4,00,000/100
                  = 40,000

Cost of goods sold = Revenue from operations - Gross profit
                           = 4,00,000 - 40,000
                           = ₹3,60,000

Average inventory = ₹55,000

Inventory turnover ratio = Cost of goods sold/ Average inventory
                                    = 3,60,000/55,000
                                    = 6.55 times