Average Inventory Rs 60 000 Inventory Turnover Ratio 8 Gross Profit 20 on revenue from operations wh...........

General Accounting Principles Ratio analysis

Average Inventory Rs 60,000; Inventory Turnover Ratio 8; Gross Profit 20% on revenue from operations; what will be Gross Profit?

Rs 1,20,000

Rs 96,000

Rs 80,000

Rs 15,000

Average Inventory Rs 60,000; Inventory Turnover Ratio 8; Gross Profit 20% on revenue from operations(net sales)

Average Inventory = Rs 60,000

inventory turnover ratio = cost of revenue from operations(cost)

average inventory

= cost of revenue from operations = 8 times

Rs 60,000

= cost of revenue from operations = 8 * Rs. 60,000

= cost of revenue from operations =Rs. 4,80,000

gross profit on cost of revenue from operations ?= 25%

= Rs. 4,80,000 * 25%

= Rs. 1,20,000

**(goss profit on revenue from operations = 25% i.e. on sales and decreases to 20 % on cost)

Submit Error

Given 20 percent solution on 25 percent. Rectify

from where 25% came into picture ?it is not mentioned in the question

in ques percentage is given 20

its 20 percent and not 25 percent GP