13 April 2015
inventory turnover ratio is sales/average inventory but in a some in the institutes PM he has taken it material consumed /average inventory. I couldn't get the logic in that
13 April 2015
If the figure of 'Sales' if full of materials, then what you told is correct. Otherwise, material consumed will be the numerator.
It could be an error you saw in PM. Don't worry. You're conceptually right and marks will also be awarded, provided the 'sales' figure is only of materials.
CAclubindia
