What this calculator does
GMROI (gross margin return on investment) works out how many dollars of gross profit each dollar tied up in inventory returns. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
FormulaGMROI = Gross profit / Average inventory cost, where Gross profit = Net sales − COGS and Average inventory cost = (Beginning + Ending) / 2
The inputs explained
| Field | What to enter |
|---|---|
| Net sales ($) | A number, measured in your currency. Starts at 600000. |
| Cost of goods sold ($) | A number, measured in your currency. Starts at 420000. |
| Beginning inventory cost ($) | A number, measured in your currency. Starts at 90000. |
| Ending inventory cost ($) | A number, measured in your currency. Starts at 70000. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with net sales
Every other input is held at the calculator’s starting values while net sales varies. Select any row to load that scenario into the calculator.