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Unit sold,cost of goods,price, closing stock.at that time Inventory turnover ratio=quantity sold*cost/average inventory, is it correct or not?

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Question ajoutée par Mohammad Khorshed Alam QIA , Internal Auditor , Alam Group of Companies
Date de publication: 2013/08/27
Utilisateur supprimé
par Utilisateur supprimé

If you use the financial values of the inventory: Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory   The average inventory can be calculated as follows: Average Inventory = (Beginning Inventory + End Inventory) /2   An Inventory Turnover Ratio is of course only valid if there were no changes in the costs of goods or a revaluation of the inventory during the reporting period.
  Some ERP systems do not use the financial values, but the stock items as basis to calculate the Inventory Turnover.
In that case it looks as follows: Inventory Turnover = Number of Goods Sold / Average Number of Goods in Inventory

MOHAMMED FARHATH
par MOHAMMED FARHATH , Accountant & Audit assistant , SHEIKH ABDULLAH & CO. (Chartered Accountants)

WRONG

taha amer
par taha amer , Finance Manager , Arabia ‎Holding

not

Utilisateur supprimé
par Utilisateur supprimé

It is not correct.

Mohammad Khorshed Alam QIA
par Mohammad Khorshed Alam QIA , Internal Auditor , Alam Group of Companies

what is the correct procedure?