Gross Margin Return On Labour (GMROL) Calculator Explained:
a) What is this? Gross Margin Return On Labour (GMROL). This calculator tells you, as a percentage of GP$, how much labour is costing a business. Unsurprisingly, this is also known as "Wages as a percentage of GP".
b) What does this tell me? How your wages are changing as a percentage of GP$. There are other measures that you can use, but this one is used more commonly where a business or industgry has margins which are under pressure.
c) Why should I use it? To help you manage and measure your costs. This calculation will allow you to track the number more carefully. If the percentage is low it can often mean a stressed staff, higher staff turnover, missed sales or it could also mean that you have improved efficiencies. Higher percentage wages might mean reduced profit by employing too many staff.
d) Caution: There are other measures for managing wages that you should be aware of. Further, you should be aware that sometimes a higher wages percentage can be good, or it can be bad depending on the situation. Likewise, a lower wages percentage can be a good thing or a bad thing depending on the situation. Changes to the wages percentage is a business decision, this calculator simply provides you with the data.