Question

Refer to the following information to answer the next 4 questions (Q5 to Q8)  

What is the stock turnover ratio of the company for the year ended 31 March 2020?

A 2.29 times Correct Answer Incorrect Answer
B 3.43 times Correct Answer Incorrect Answer
C 3.05 times Correct Answer Incorrect Answer
D 3.93 times Correct Answer Incorrect Answer
E 2.03 times Correct Answer Incorrect Answer

Solution

Stock turnover ratio = Cost of goods sold / Average stock   Cost of goods sold = 3,00,000 (calculated earlier) Average stock = (opening stock + closing stock) / 2 = (76250 + 98500) / 2 = 87,375   Stock turnover ratio    = 300,000/ 87,375 = 3.43 times

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