GMROII Dollars Calculator

Gross Margin Return On Inventory Invested (\$) Calculator Explained:

(a) What is this? Gross Margin Returned On Inventory Invested (GMROII), generates a number which is expressed as a \$. It combines GP% and stock turn to give you an efficiency ratio.

(b) What does this tell me? This calculator combines stock turn and GP% to determine a ratio. In this calculation it is expressed as a \$. The more money you make (the greater the \$), generally the better things are. \$1 means you invested \$1 at the start of the year (or time period) and that \$1 generated \$1 of GP profit by the end of the year (or time period). \$2 means you invested \$1 and got \$2 of GP back at the end of the year. GMROII became popular when it was discovered large retailers used it to assess their category performance.

(c) Why should I use it? Because it combines two major measures, how much money you are making (GP\$) and how often you make it (Stock Turn).

(d) Caution: GMROII is just one tool at your dispoal. It does not tell you to exit or enter categories or products, but it is a useful point of comparison. It does not tell you how much money you are making, it is simply a ratio. Any decisions are entirely at your own risk.

GMROII Dollars Calculator
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