174 :- Opening Inventory Rs 80,000; Purchases Rs 4,30,900; Direct Expenses Rs 4,000; Closing Inventory Rs 1,60,000; Administrative Expenses Rs 21,100; Selling and Distribution Expenses Rs 40,000; Revenue from Operations,I.e, Net Sales Rs 10,00,000. Calculate Inventory Turnover Ratio; Gross Profit Ratio and Operating Ratio.
Solution :-
CASE 1
Cost of Goods Sold = Opening Inventory + Purchases + Direct Expenses – Closing Inventory
= 80,000 + 4,30,900 + 4,000 – 1,60,000
= Rs 3,54,900
Inventory Turnover Ratio = Cost of Goods Sold/Average Inventory
= 3,54,900/[2,40,000/2]
= 3,54,900/1,20,000
= 2.96 Times
CASE 2
Gross Profit = Revenue from Operations – Cost of Goods Sold
= 10,00,000 – 3,54,900
= 6,45,100
Gross Profit Ratio = Gross Profit/Revenue from Operations x 100
= 6,45,100/10,00,000 x 100
= 64.51%
CASE 3
Operating Ratio = (Cost of Goods Sold + Operating Expenses)/Revenue from Operation x 100
= (3,54,900 + 40,000 + 21,100)/10,00,000 x 100
= 4,16,000/10,00,000 x 100
= 41.6%