From the following information of Ajanta Ltd., calculate 'Inventory Turnover Ratio':? Opening inventory 19,000 Closing inventory 21,000 Purchases…

Inventory Turnover Ratio = Cost of Revenue from Operations/ Average Inventory Average Inventory = (Opening inventory + Closing inventory)/ $\displaystyle 2$ = (₹$\displaystyle 19,000$ + ₹$\displaystyle 21,000$)/$\displaystyle 2$ = ₹$\displaystyle 20,000$ Cost of Revenue from Operations = Opening Inventory + Net purchases + Direct Expenses – Closing Inventory = ₹$\displaystyle 19,000$ + (₹$\displaystyle 80,000$ – ₹$\displaystyle 1,000$) + (₹$\displaystyle 9,000$ + ₹$\displaystyle 4,000$) -₹$\displaystyle 21,000$ = ₹$\displaystyle 90,000$ Inventory Turnover Ratio = ₹$\displaystyle 90,000$/₹$\displaystyle 20,000$ = $\displaystyle 4.5$ times