A company has cost of goods sold of Rs. 1,200,000 and average inventory of Rs. 300,000. What is its inventory turnover ratio?
Correct answer: C. 4 times
- A. 2 times
- B. 3 times
- C. 4 times
- D. 5 times
Explanation
Inventory turnover is calculated by dividing cost of goods sold by average inventory. Rs. 1,200,000 divided by Rs. 300,000 gives a turnover of 4 times.
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