Question

A company's financials show: • Net Sales: ₹1,000 lakh • Cost of Goods Sold (COG

  • S : ₹700 lakh • Opening Inventory: ₹100 lakh • Closing Inventory: ₹150 lakh What is the Inventory Turnover Ratio, and what does it indicate?
A 4.2 times – indicating efficient stock usage
B 5.1 times – suggesting high liquidity
C 3.3 times – indicating slow inventory movement
D 7.5 times – excellent sales conversion
E 5.6 times- showing stock is selling efficiently
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