Tool

GMROI Calculator

Gross Margin Return on Investment (GMROI) measures how many dollars of gross margin are generated by every dollar invested in inventory.

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To calculate manually:

Subtract COGS from Total Sales to get Gross Margin.
Divide Gross Margin by Average Inventory Cost.

A GMROI of 2.5 means you generate $2.50 in margin for every $1 invested in stock.

Understanding the Result

< 1.0: You are losing money on this inventory.
1.0 - 2.0: Underperforming. Review markdowns and turns.
2.0 - 3.2: Average/Healthy for specialty retail.
> 3.2: Excellent performance.

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