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Ratio analysis

Financial Management

When should we use cost of goods sold and when should we use sales for calculating ratios

Koti reddy

CA Inter

★ 0

12-Sep-24 11:11

203

Answers (2)

For computation of stock turnover ratio always prefer cost of goods sold. If it is either not given or not computable then sales may be considered

aditya yanamandra

Faculty

12-Sep-24 11:32

Mostly for stock we have to exact rate for ratio analysis (accrual principal concept that's why we deduct profit from sales) I.e, cogs with out profit may results correct analysis other wise mentioned in problem

anju B

CA Inter

★ 19K+

18-Sep-24 13:52

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