ABC (Ltd) has asked for you assistance, and their accountant has given you the information below: Cash sales R90,000 Credit sales R300,000 - Returns inwards R40,000 - Opening stock R20,000 Closing stock R40,000 Gross profit ratio 30% Task: Assist ABC to calculate its inventory turnover ratio, and then explain to them the implications of having either a very high or a very low inventory turnover ratio.

ABC (Ltd) has asked for you assistance, and their accountant has given you the information below: Cash sales R90,000 Credit sales R300,000 Returns inwards R40,000 Opening stock R20,000 Closing stock R40,000 Gross profit ratio 30% Task: Assist ABC to calculate its inventory turnover ratio, and then explain to them the implications of having either a very high or a very low inventory turnover ratio. Click here for Financial statement formulae