{1.9} Inventory Turnover Ratio Cost of Goods Sold
Inventory Turnover Ratio =
Ave. Inventory
Cost of Goods Sold = Total Sales – Gross Profit For year 04 -05 = 92,421.96 – 20,551.76 = 71,870.20 05 - 06 = 125,729.74 – 29,730.20 = 95,999.54 06 - 07 = 134,397.10 – 24,916.88 = 1,09,480.22 07 - 08 = 138,488.33 – 29,492.74 = 1,08,995.59 Ave. Inventories = (Opening stock of inventory + Closing stock of Inventory)/ 2 For year 04 - 05 = 2,691.57 + 5,519.91 / 2 = 4,105.74 05 - 06 = 5,519.91 + 6,376.20/ 2 =
5,948.05
06 - 07 = 6,376.20 + 14,696.98/ 2 =
10,536.59
07 - 08 = 14,696.98 + 11,020.20/ 2 = 12,858.59
Inventory Turnover Ratio For year
04 – 05 =
05 – 06 =
06 – 07 =
07 – 08 =
71,870.20 4,105.74
95,999.54 5,948.05
1,09,480.22 10,536.59
1,08,995.59 12,858.59
= 17.50 : 1
= 16.14 : 1
= 10.39 : 1
= 8.48 : 1
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