Calculate the 'Inventory Turnover Ratio' from the following information : Revenue from operations ₹ $\displaystyle 15,00,000$ Gross profit $\displaystyle 20$% Opening inventory ₹ $\displaystyle 2,00,000$ Purchases ₹ $\displaystyle 18,00,000$

Inventor Turnover Ratio = Cost of revenue from operations …………………………. (½) Average Inventory Cost of revenue from operations = Revenue from operations- Gross Profit = ₹$\displaystyle 15,00,000$ - $\displaystyle 20$% of ₹$\displaystyle 15,00,000$ = ₹$\displaystyle 15,00,000$ - ₹$\displaystyle 3,00,000$ = ₹$\displaystyle 12,00,000$………………………………………… ($\displaystyle 1$) Cost of revenue from operations = Opening inventory + Purchases – Closing inventory $\displaystyle 12,00,000$ = $\displaystyle 2,00,000$ + $\displaystyle 18,00,000$ – Closing inventory Closing inventory = ₹$\displaystyle 8,00,000$………………………………………… (½) Average Inventory = Opening inventory + Closing inventory $\displaystyle 2$ = ₹$\displaystyle 2,00,000$ + ₹$\displaystyle 8,00,000$ = ₹$\displaystyle 10,00,000$ = ₹$\displaystyle 5,00,000$………….…..(½) $\displaystyle 2$ $\displaystyle 2$ Inventory Turnover Ratio= $\displaystyle 12,00,000$ / $\displaystyle 5,00,000$ = $\displaystyle 2.4$ times…………………………...(½)