Determine stock turnover ratio if, Opening stock is Rs 31,000 , Closing stock is Rs 29,000, Sales is Rs 3,20,000 & Gross profit ratio is 25% on sales.
A)31 times
B)11 times
C)8 times
D)32 times

Question

Quizplus · Accepted Answer

The stock turnover ratio is calculated as Cost of Goods Sold (COGS) divided by Average Stock. First, calculate COGS: Sales - Gross Profit = Rs 3,20,000 - (25% of Rs 3,20,000) = Rs 2,40,000. Average Stock = (Opening Stock + Closing Stock) / 2 = (Rs 31,000 + Rs 29,000) / 2 = Rs 30,000. Stock Turnover Ratio = COGS / Average Stock = Rs 2,40,000 / Rs 30,000 = 8 times.

Determine Stock Turnover Ratio If, Opening Stock Is Rs 31,000