GMROI Calculator

Calculate GMROI



GMROI Definition

GMROI is defined as the gross margin return on an investment over a given period of time. It measures the profitability of a retailer's inventory by comparing the gross profit earned to the average inventory cost.

Formula

The formula to calculate the GMROI is:

\[ GMROI = \left( \frac{GP}{AIC} \right) \times 100 \]

Where:

Example

Let's say the gross profit is $50,000 and the average inventory cost is $25,000. Using the formula:

\[ GMROI = \left( \frac{50000}{25000} \right) \times 100 \]

We get:

\[ GMROI = 200 \]

So, the GMROI is 200%.

Extended information about "GMROI-Calculator"

GMROI Calculation

Formula: \( GMROI = \frac{\text{Gross Margin}}{\text{Average Inventory Cost}} \)

Example: \( GMROI = \frac{50000}{20000} \)

Gross Margin Calculation

Formula: \( GM = \text{Revenue} - \text{Cost of Goods Sold} \)

Example: \( GM = 100000 - 60000 \)

Gross Margin Return on Inventory (GMROI) Calculation

Formula: \( GMROI = \frac{\text{Gross Margin}}{\text{Average Inventory Cost}} \)

Example: \( GMROI = \frac{75000}{25000} \)