Gross Margin Return On Floor space (GMROF) Calculator Explained:
a) What is this? Gross Margin Return On Floor space (GMROF). This calculator helps you assess your GP$ performance using only the selling space (m2 or sq. ft) in a store.
b) What does this tell me? The GP$ made per square metre/foot of selling space. Selling space is defined as that space which is dedicated to selling. Thus it excludes the office, storeroom etc.
c) Why should I use it? It is useful to see if the GMROF is increasing or decreasing. By using this calculation, you can see whether you growing or slowing the business. It will indicate whether your promotions, pricing, ranging, service etc., have been effecive at driving up sales and GP$ per square metre/foot.
d) Caution: You can also use monthly totals rather than annual sales. Further, be aware that this is just one measure of space, there are others. This measure is often used to compare stores within a group, rather than individual stores. It doesn't tell you what decisions to make. Any decisions made are at your own risk.