GMROI Calculator
Calculate your Gross Margin Return on Investment to measure inventory profitability
GMROI Results
Interpretation
Enter your values to calculate your GMROI and see analysis.
About GMROI
Gross Margin Return on Investment (GMROI) is a key retail metric that evaluates how much gross profit is earned for every dollar invested in inventory.
GMROI Formula
GMROI = Gross Margin ÷ Average Inventory Cost
or
GMROI = (Gross Margin % × Inventory Turnover)
Industry Benchmarks
| GMROI Range | Interpretation |
|---|---|
| Below 1 | Losing money on inventory |
| 1-2 | Marginal performance |
| 2-3 | Good performance |
| 3-5 | Excellent performance |
| 5+ | Outstanding performance |
Frequently Asked Questions
Why GMROI Matters for Retailers
GMROI helps retailers make smarter inventory decisions by showing which products generate the best return on inventory investment. Unlike simple gross margin, GMROI considers both profitability and inventory efficiency.
Our free GMROI calculator provides instant insights into your inventory performance. Use it to identify underperforming products, optimize purchasing decisions, and maximize your retail profitability. The calculator works entirely in your browser – no data is sent to servers, ensuring complete privacy for your business numbers.