Question
A firm’s net sales are ₹5 crore, and cost of goods
sold is ₹3.5 crore. Inventory at the start of the year was ₹80 lakhs and at the end ₹1.2 crore. Calculate the Inventory Turnover Ratio.Solution
ITR = COGS / Avg Inventory = ₹3.5 Cr / ₹1 Cr = 3.5 times
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