GMROI Calculator
GMROI Calculator
Component | Description |
---|---|
Gross Margin | The difference between sales revenue and the cost of goods sold. |
Average Inventory Cost | The average cost of inventory over a specific period. |
GMROI | Gross Margin Return on Investment, a measure of a retailer’s ability to turn inventory into cash above the cost of inventory. |
Formula | GMROI = Gross Margin / Average Inventory Cost |
Purpose | Used to evaluate the profitability of inventory and measure the efficiency of inventory investments. |