Use the following financial data to answer the questions: Current Assets = Rs. 8,40,000  |  Current Liabilities = Rs. 3,50,000  |  Inventory = Rs. 2,10,000 Net Sales = Rs. 18,00,000  |  Cost of Goods Sold = Rs. 13,50,000  |  Net Profit after Tax = Rs. 1,80,000 Total Assets = Rs. 15,00,000  |  Shareholders' Equity = Rs. 9,00,000 What is the Inventory Turnover Ratio of the company?

Inventory Turnover Ratio = Cost of Goods Sold / Inventory = Rs. 13,50,000 / Rs. 2,10,000 = 6.43 (approximately 6.4 times). This ratio measures how many times a company sells and replaces its inventory during a period. A higher ratio generally indicates efficient inventory management. It is important to use Cost of Goods Sold (not Net Sales) in the numerator when inventory is valued at cost, which is the standard approach. The result indicates the company cycles through its inventory approximately 6.4 times per year.