Home › CA Inter › Financial Management › Activity Ratios › COGS ₹12,00,000; Opening inventory ₹1,50,000; Cl…
COGS ₹12,00,000; Opening inventory ₹1,50,000; Closing inventory ₹2,50,000. Inventory Turnover Ratio is:
A4 times
B6 times
C5 times
D8 times
Answer & Solution
Correct answer: B. 6 times
1. Average Inventory = (1,50,000 + 2,50,000) / 2 = ₹2,00,000.
2. Inventory Turnover = COGS / Avg Inventory = 12,00,000 / 2,00,000.
3. Result = 6 times.
_Source: ICAI BoS CA Inter Paper 6A, Ch 3 "Financial Analysis and Planning — Ratio Analysis", §3.3(i)_
Related questions
Total Assets ₹50 lakh; Sales ₹2 crore. Total Assets Turnover Ratio is:A high Fixed Assets Turnover Ratio could indicate:Working Capital Turnover Ratio is:Credit Sales ₹36,00,000; Average Receivables ₹6,00,000. Receivables Turnover Ratio is:Average Collection Period equals:Inventory Turnover Ratio is: