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Calculate revenue from operations of B.N ltd.from the following information: Current assets 800000 Quick ratio 1.5:1 Current ratio 2:1 Inventory turnover ratio 6 times Goods were sold at a profit of 25% on cost?
Most Upvoted Answer
Calculate revenue from operations of B.N ltd.from the following inform...
Revenue form operations are Rs.15,00,000

6=. cost of revenue form operations
/ Average inventory

6=. cost of revenue form operations
/ 200000
200000×6 = 1200000=CORO

12,00,000×25\100 = 3,00,00

Revenue form operations= cost + profit
" = 12,00,000 + 3,00,000 = 15,00,000
Community Answer
Calculate revenue from operations of B.N ltd.from the following inform...
Revenue from Operations Calculation for B.N Ltd.

Current Assets: $800,000
Quick Ratio: 1.5:1
Current Ratio: 2:1
Inventory Turnover Ratio: 6 times
Profit on Goods Sold: 25% on cost

To calculate the revenue from operations for B.N Ltd, we need to consider the given information and use relevant formulas to determine the figures. Let's break down the calculation step-by-step:

1. Calculate Current Liabilities:
Since the quick ratio and current ratio are given, we can determine the current liabilities of the company. The quick ratio is 1.5:1, which means that for every $1.5 of quick assets, there is $1 of current liabilities. Similarly, the current ratio is 2:1, indicating that for every $2 of current assets, there is $1 of current liabilities.

Quick Assets = Quick Ratio * Current Liabilities
1.5 * Current Liabilities = Current Assets ($800,000)
Current Liabilities = $800,000 / 1.5
Current Liabilities = $533,333.33

2. Calculate Inventory:
The inventory turnover ratio is given as 6 times, which means the company sells and replenishes its inventory 6 times in a given period. To calculate the inventory, we need to divide the cost of goods sold by the inventory turnover ratio.

Cost of Goods Sold = Revenue x (1 - Profit %)
Cost of Goods Sold = Revenue x (1 - 0.25)
Cost of Goods Sold = Revenue x 0.75

Inventory = Cost of Goods Sold / Inventory Turnover Ratio
Inventory = (Revenue x 0.75) / 6

3. Calculate Revenue:
To calculate the revenue, we need to add the cost of goods sold and the profit on goods sold.

Revenue = Cost of Goods Sold + Profit on Goods Sold
Revenue = (Revenue x 0.75) / 6 + (Revenue x 0.25)

Solving this equation will give us the revenue from operations for B.N Ltd.

However, since the equation is recursive and cannot be directly solved, we can use an iterative approach to approximate the revenue value. For example, we can assume an initial revenue value and calculate it iteratively until we find a value that satisfies the equation.

Please note that the given information does not provide specific values for revenue, so we cannot determine the exact revenue figure without additional information.

In conclusion, to calculate the revenue from operations for B.N Ltd, we need to know the specific revenue value or have additional information regarding sales, expenses, and other financial aspects of the company.
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Calculate revenue from operations of B.N ltd.from the following information: Current assets 800000 Quick ratio 1.5:1 Current ratio 2:1 Inventory turnover ratio 6 times Goods were sold at a profit of 25% on cost?
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