SOLUTION
(i) Opening Inventory = 28,000
Closing Inventory = 22,000
Average Inventory = (Opening Inventory + Closing Inventory) / 2
= (28,000 + 22,000) / 2
= Rs 25,000
Cost of Goods Sold = Opening Inventory + Purchases + Carriage Inwards – Closing Inventory
= 28,000 + 46,000 + 4,000 − 22,000
= 56,000
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
= 56,000 / 25,000
= 2.24 Times
(ii) Operating Expenses = Office Expenses + Selling and Distribution Expenses
= 4,000 + 2,000
= 6,000
Operating Cost = Cost of Goods Sold + Operating Expenses
= 56,000 + 6,000
= 62,000
Net Sales = Rs 80,000 × 100
Operating Ratio = Operating Cost / Net Sales × 100
= 62,000 / 80,000 × 100
= 77.5%
(iii) Working Capital = 40,000
Working Capital Turnover Ratio = Net Sales / Working Capital
= 80,000 / 40,000
= 2 Times
*Note: Sales return will not be considered as amount of net sales is provided in the question.