Download App

Ratio Analysis — Accountancy STD 12 — Question

Tamilnadu BoardEnglish MediumSTD 12AccountancyRatio Analysis2 Marks
Question
What is the inventory conversion period? How is it calculated?
✓

Answer

The inventory conversion period is the time taken to sell the inventory.
A shorter inventory conversion period indicates more efficiency in the management of inventory. It is computed as follows:
$\text { Inventory conversion period (in days) }=\frac{\text { Number of days in a year }}{\text { Inventory turnover ratio }}$
$\text { Inventory conversion period (in months) }=\frac{\text { Number of months in a year }}{\text { Inventory turnover ratio }}$

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "Answer the following questions:" from Ratio Analysis→Ratio Analysis — all question types→Accountancy STD 12 question papers→Tamilnadu Board STD 12 question papers→Tamilnadu Board question paper generator→

Similar questions

From the following receipts and payments account and the additional information given below, calculate the amount of subscription to be shown in the Income and expenditure account for the year ending $31^{st}$ December, $2018.$
Receipts ₹ ₹ Payments ₹
To Subscription        
$2017$ $28,000$      
$2018$ $1,72,000$      
$2019$ $12,000$ $2,12,000$    
         
Additional information: Subscription outstanding for the year $2018$ is $₹ 8,000.$
→
Mala and Anitha are partners, sharing profits and losses in the ratio of 3 : 2. Mercy is admitted into the partnership with 1/5 share in the profits. Calculate new profit sharing ratio and sacrificing ratio.
→
Priya and Kala are partners Priya draws $Rs. 8,000$ at end of each quarter. Interest on drawings $@6\%$ p.a. Kala draws Rs. $2000/-$ per month at the end of the month.
→
Calculate quick ratio: Total current liabilities ₹ 2,40,000; total current assets ₹ 4,50,000; Inventories ₹ 70,000; Prepaid Expenses ₹ 20,000
→
What are books maintained by Not-for-profit organisation?
→
What is meant by ‘Tally ERP9”?
→
From the following information calculate a debt-equity ratio.

Balance Sheet (Extract) as on
31st March, 2019

Particulars Amount ₹
I. EQUITY AND LIABILITIES  
1. Shareholders' funds  
(a) Share capital  
Equity share capital 6,00,000
(b) Reserves and surplus 2,00,000
2. Non-current liabilities  
Long-term borrowings (Debentures) 6,00,000
3. Current liabilities  
(a) Trade payables 1,60,000
(b) Other current liabilities  
Outstanding expenses 40,000
Total 16,00,000
→
Kavitha is a partner in a firm. She withdraws ₹ 2,500 p.m. regularly. Interest on drawings is charged @ 4% p.a. Calculate the interest on drawings using average period, if she draws
  1. at the beginning of every month
  2. in the middle of every month
  3. at the end of every month
→
From the following details, calculate the missing figure.
Particulars ₹
Closing capital as on 31.3.2018 80,000
Additional capital introduced during the year 30,000
Drawings during the year 15,000
Opening capital on 01.4.2017 ?
Loss for the year ending 31.3.2018 25,000
→
Ramu, Somu and Gopu are partners sharing profits in the ratio of $3:5:7$. Gopu retires and the share is purchased by Ramu and Somu in the ratio of $3:1$. Find the new profit sharing ratio and gaining ratio.
→