| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Revenue From Operations, i.e., Net Sales Gross Profit | 1,50,000 | Opening Inventory | 29,000 |
| Cost of Revenue From Operations | 30,000 | Closing Inventory | 31,000 |
| (Cost of Goods Sold) | 1,20,000 | Debtors | 16,000 |
From the above information, calculate following ratios:
(i) Gross Profit Ratio,
(ii) Inventory Turnover Ratio, and
(iii) Trade Receivables Turnover Ratio.
SOLUTION
(i)Sales = 1,50,000
Gross Profit = 30,000
Gross Profit Ratio = Gross profit × 100 / Net Sales
= 30,000 × 100 / 1,50,000
= 20%
(ii)Opening Inventory = 29,000
Closing Inventory = 31,000
Average Inventory = Opening Inventory + Closing Inventory / 2
= 29,000 + 30,000 / 2
= 30,000
Cost of Goods Sold = 1,20,000
Inventory turnover ratio = Cost of goods sold / Average Inventory
= 1,20,000 / 30,000
= 4 Times
(iii)Trade receivable turnover ratio = Net Credit sales / Average Trade receivables
Trade receivable turnover ratio = 1,50,000 / 16,000
= 9.4 Times