The inventory turnover ratio is calculated by dividing the cost of goods sold for a period by the average inventory for that period
COGS / average stock = Rate of turnover
cogs = opening stock + purchases - closing stock2000 + 28000 - 3000 = 27000
Average stock = opening stock + closing stock / 22000 + 3000 / 2 = 2500
Rate of turnover = 27000/ 2500 = 10.8 times
