Question
A firm has Cost of Goods Sold = ₹36,00,000 and Closing
Inventory = ₹6,00,000. What is the Inventory Turnover Ratio, if opening and closing stock are equal?Solution
Average Inventory = ₹6,00,000 Inventory Turnover Ratio = COGS / Avg Inventory = ₹36,00,000 / ₹6,00,000 = 6 times
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