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Inventory Gross Profit Return Calculator

Calculate GMROI as a multiple and percentage of average inventory cost.

  • Formula & worked example
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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Edit a calculated value to solve backwards, or lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Opening inventory of 8,000 and closing inventory of 12,000 average to 10,000. Gross profit of 15,000 produces a GMROI of 1.5, or 150%.

Average inventory = (opening + closing) ÷ 2; GMROI = gross profit ÷ average inventory cost

Worked example

Enter these known values and leave the other values blank.

Starting inventory cost
8000 USD
Final inventory cost
12000 USD
Gross profit
15000 USD
Average inventory cost
10000 USD
GMROI
1.5
GMROI percentage
150 %

Assumptions and limitations

  • Use gross profit after cost of goods sold, rather than revenue, in the numerator. Value inventory at cost for the same period; a two-point average can miss seasonal inventory changes.
  • Use consistent periods, currency and accounting definitions. The result follows the stated formula and the figures you supply.

Common questions

Is GMROI based on sales revenue?

Use gross profit after cost of goods sold, rather than revenue, in the numerator. Value inventory at cost for the same period; a two-point average can miss seasonal inventory changes.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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