From the following statement of profit and loss of reynold ltd , calculate inventory turnover ratio:

Explanation

Inventory Turnover Ratio =`("Cost of revenue from operations"))/("Average inventory") =(Rs 500000)/(Rs 212500)=2.35` Times
Cost of revenue from opertions (cost of goods sold)
=cost of matierial s consumed +change in
Inventroy of fineshed goods and wip
=Rs 5250000-Rs 250000=Rs 500000
Average inventory =opening inventory (materials , finished goods and wip)
`("+closing inventory(matierials ,finished goods and wip)")/(2)`
`=(Rs 200000 + Rs 50000+rs 10000+ Rs 75000)/(2)=Rs 212500`