GMROI Calculator
Calculate GMROI per category from sales, COGS and average inventory at cost, with turns, sell-through, weeks of supply and a totals comparison row.
Categories
Columns, left to right: category, net sales, COGS, average inventory at cost, units sold, units on hand.
| Category | Net sales | Gross margin | GM % | Avg inventory (cost) | Turns | GMROI | Sell-through | Weeks of supply |
|---|---|---|---|---|---|---|---|---|
| Apparel | $480,000 | $240,000 | 50.0% | $96,000 | 2.50 | 2.50 | 77.9% | 20.8 |
| Footwear | $320,000 | $128,000 | 40.0% | $80,000 | 2.40 | 1.60 | 73.2% | 21.7 |
| Accessories | $140,000 | $77,000 | 55.0% | $21,000 | 3.00 | 3.67 | 79.0% | 17.3 |
| Total | $940,000 | $445,000 | 47.3% | $197,000 | 2.51 | 2.26 | — | 20.7 |
Between 2 and 3.5 is the range most general retailers target. Below 3 usually means either margin or turns has room to move.
GMROI = gross margin ÷ average inventory at cost = GM% ÷ (1 − GM%) × turns · turns = COGS ÷ average inventory at cost · weeks of supply = weeks ÷ turns
Worked example: $100 of sales at $60 COGS is $40 of gross margin, a 40% margin. On $20 of average inventory at cost that is GMROI = 40 ÷ 20 = 2.00. The decomposition agrees: 0.40 ÷ 0.60 × 3 turns = 2.00. With 52 weeks in the period, 3 turns is 17.3 weeks of supply. In the table above the first category returns 2.50 against turns of 2.50.
Average inventory must be valued at cost, not retail — mixing the two is the single most common way GMROI gets overstated. GMROI is a period ratio, so quarterly figures are not comparable with annual ones unless you annualise the turns. Sell-through here is units sold ÷ (units sold + units still on hand), the receipt-based definition used in retail buying, so zero on-hand units make it read 100%. All figures stay in your browser and nothing is uploaded. Estimates for planning, not financial advice.
What is the GMROI Calculator?
GMROI — gross margin return on inventory investment — answers the question retail buyers actually care about: how much gross margin does every unit of cash tied up in stock return?
- GMROI per category and blended across the whole table
- Gross margin, margin percentage and inventory turns for every row
- Sell-through percentage from units sold and units on hand
- Weeks of supply derived from turns and the period length
- Editable category rows with add and remove controls
- Zero average inventory renders a dash instead of dividing
How to use the GMROI Calculator
- 1
Set your currency and the number of weeks the figures cover — 52 for a year, 13 for a quarter.
- 2
Add a row per category with net sales, COGS and average inventory valued at cost.
- 3
Enter units sold and units still on hand to get the sell-through percentage.
- 4
Compare GMROI, turns and weeks of supply across the categories in the table.
- 5
Check the totals row for the blended GMROI across everything you entered.
About the GMROI Calculator
GMROI — gross margin return on inventory investment — answers the question retail buyers actually care about: how much gross margin does every unit of cash tied up in stock return? It is gross margin divided by average inventory valued at cost, and it sits between a margin metric and a turns metric because it multiplies the two together.
Add a row per category with net sales, cost of goods sold, average inventory at cost and unit counts. The calculator returns GMROI, gross margin percentage, inventory turns, sell-through and weeks of supply for each row plus a totals line, so a high-margin slow mover and a low-margin fast mover can be compared on the same number.
A category with zero average inventory shows a dash rather than dividing by zero, and inventory must be valued at cost rather than retail for the ratio to mean anything. Everything is computed in your browser and nothing is uploaded, so real category performance data never leaves your machine. Estimates for planning, not financial advice.
Frequently asked questions
What is the GMROI formula?
GMROI = gross margin ÷ average inventory at cost. It is equivalent to gross margin % ÷ (1 − gross margin %) × inventory turns. 100 of sales at 60 COGS is 40 of margin; on 20 of average inventory at cost that is a GMROI of 2.0, and the decomposition agrees: 0.40 ÷ 0.60 × 3 turns = 2.0.
What is a good GMROI?
Most general retailers target somewhere above 2.0, meaning every unit of cash in stock returns twice its value in gross margin over the year. Above 3.5 the inventory is working hard. Below 1.0 the category returns less margin than the cash tied up in it, before any rent, wages or shrink.
Should inventory be valued at cost or retail for GMROI?
At cost, always. Valuing inventory at retail inflates the denominator and makes GMROI look far worse than it is; using retail in the numerator and cost in the denominator makes it look far better. Mixing the two is the single most common way GMROI gets misquoted.
How is GMROI different from inventory turns?
Turns only measure speed — how many times the stock sold through. GMROI weights that speed by profitability, so a slow-moving line with a very high margin can beat a fast-moving commodity. That is exactly why buyers use GMROI rather than turns alone when comparing categories.
How do I calculate weeks of supply?
Divide the number of weeks in the period by the inventory turns for that period. Three turns over 52 weeks is 17.3 weeks of supply. It is the easiest of these numbers to explain on a shop floor, because it is simply how long the current stock would last at the current rate.
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