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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=(GPAIC)×100

Where:

Example

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

GMROI=(5000025000)×100

We get:

GMROI=200

So, the GMROI is 200%.