The average inventory of AB Ltd. is ₹ $\displaystyle 1,00,000$ and the inventory turnover ratio is $\displaystyle 6$ times. Calculate the amount of revenue from operations if goods are sold at a profit of $\displaystyle 25$% on revenue from operations.

Revenue from Opera-ons= Cost of Revenue from Opera-ons + Gross Profit……………½ Inventory Turnover Ra-o= Cost of Revenue from Opera-ons/ Average inventory…… ½ Therefore, $\displaystyle 6$= Cost of Revenue from Opera-ons/$\displaystyle 1,00,000$ Cost of Revenue from Opera-ons= ₹$\displaystyle 6,00,000$…………………………………………………..1 Revenue from Opera-ons= $\displaystyle 6,00,000$ + $\displaystyle 25$% of Revenue from Opera-ons Revenue from Opera-ons= $\displaystyle 6,00,000$ + Revenue from Opera-ons $\displaystyle 4$ Revenue from Opera-ons= $\displaystyle 6,00,000$ x $\displaystyle 4$ $\displaystyle 3$ Revenue from Opera-ons= ₹$\displaystyle 8,00,000$………………………………………………………………………..1