VP INSTITUTE OF MANAGEMENT STUDIES AND

RESEARCH
Group discussion
Topic Name :- Stock turnover ratio
(Management Accounting)
(BBA -2)
Submitted by group:-
Sr. Student Name Roll University
No No Exam No
1 Madhav athanikar 67
Under Guidance of,
R. R. KOLHATKAR.
V.P.I.M.S.R
Year 2021-2022
EFFICIENCY RATIO (ACTIVITY RATIO):-

1. STOCK TURNOVER RATIO:-

Stock turnover ratio :- Cost of good sold = no of times

Average Stock

 Cost of good sold :- Op. stock + Purchase +

Incilental exp. – Cl. Stock
 Average Stock :- Op. stock + Cl. Stock
2
LIQUIDITY RATIO (SHORT TERM SOLVENCY RATIO) :-
2. CURRENT RATIO :-

Current ratio :- current asset

Current liabilities

 Quick Asset :- C.A – (stock + prepaid expenses)

 Quick Liability :- C. L – bank overdraft

EXAMPLE :-
 Balancesheet
Liability Amt Asset Amt
Share cap - 100000 Fixed asset 1500000
10000 shares of
rs 10 each
General reserve 90000 Stock 425000
P&L 75000 Debtors 180000
6%debenture 300000 Cash 610000
Creditors 350000
Proposed 100000
dividend
Total 27500000 Total 27500000

Profit & Loss account for 31 Dec

2014

Dr. Rs Cr. Rs
To opening 350000 By sales 3000000
stock
To purchase 1875000 By closing 425000
stock
To expenses 1000000
To N. P 200000
Total 3425000 Total 3425000

From the above statement compute

 Stock turnover ratio
  Current ratio

ANSWER :-
 Stock turnover ratio :- Cost of good sold =
no of times
Average Stock

• Cost of good sold :- Op. stock + Purchase +

Incilental exp. – Cl. Stock
:- 350000+187000+0 -
425000
C. O. G. S :- 1800000
• Average Stock :- Op. stock + Cl. Stock
2
:- 350000+425000
2
A.V :- 387500

Stock turnover ratio :- 1800000

387500
S. T. R :- 4.64 times

 Current ratio :- current asset

Current liabilities
:- stock+debtors+cash
 Creditors+ proposed
dividend
:- 425000+190000+610000
350000+100000
:- 1225000
450000
C. R :- 2.72