Gross Margin ROI Calculator
GMROI: gross profit earned per dollar of inventory.
Enter your values
ⓘ Live results
Results
- GMROI
- 2.21
- Gross profit
- $210,000.00
- Gross margin
- 35%
- Inventory turns
- 4.11x
Quick answer
GMROI is annual gross profit divided by average inventory at cost. Above 1 means inventory earns more than it costs.
GMROI = gross profit / average inventory cost
How to use the Gross Margin ROI Calculator
- 1Enter annual sales and cost of goods sold.
- 2Enter the average value of inventory held at cost.
- 3Aim above 2.0 in most retail categories.
Worked example
Using the values the calculator loads with:
Inputs
- Annual sales600000 $
- COGS390000 $
- Average inventory at cost95000 $
Results
- GMROI2.21
- Gross profit$210,000.00
- Gross margin35%
- Inventory turns4.11x
Frequently asked questions
Why not just use margin?
Margin ignores how much cash is parked in stock; GMROI captures both.
How do I raise GMROI?
Increase turns, trim slow lines, or negotiate better cost prices.
About this calculator
- Built and reviewed by James Whitfield · How we build and test calculators
- Report an error
Results are estimates for general information. For medical, legal, structural or financial decisions, confirm with a qualified professional.