Read the following hypothetical extract of Aggarwal Limited and answer the given questions on the basis of the same: | ||||||||||||||||||||||||||||||||||||||||
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Inventory turnover ratio for the year 2020 will be: |
A) 1.62 times
B) 1.82 times
C) 1.55 times
D) 1.92 times
Correct Answer: D
Solution :
[d] 1.92 times |
Hint: Inventory Turnover Ratio |
\[=\frac{Cost of Revenue from Operations}{~Average Inventory}\] |
\[ =\frac{Revenue from Operations - Gross Profit}{~Average Inventory}\] |
\[=\frac{12,00,000-\left( 12,00,000\times 12% \right)}{~5,00,000+6,00,000/2}\] |
\[=\frac{12,00,000-1,44,000}{~5,50,000}\] |
\[=\frac{10,56,000}{~5,50,000}\]=1.92 times |
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