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      Question

      SDF Ltd recorded Net Sales of ₹10,00,000 during the

      year. Its Gross Profit was ₹2,50,000. If the inventory of the company at the end of the year was ₹1,25,000, what is the Inventory Turnover Ratio? 
      A 1.33 times Correct Answer Incorrect Answer
      B 2 times Correct Answer Incorrect Answer
      C 4 times Correct Answer Incorrect Answer
      D 6 times Correct Answer Incorrect Answer
      E 8 times Correct Answer Incorrect Answer

      Solution

      Inventory Turnover = COGS / Inventory  COGS = Sales – Gross Profit = ₹10,00,000 - ₹2,50,000 = ₹7,50,000  Thus, Inventory Turnover = ₹7,50,000  / ₹1,25,000 = 6 times 

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