GMROI Calculator: Gross Margin Return on Inventory
Free tool · Updated October 2, 2026 · By CouponTalk · Reviewed by CouponTalk Expert Reviews on
Your result
Enter your measurements to see your result.
Quick answer
GMROI = gross margin ÷ average inventory at cost. Earning ₹3 lakh of gross margin while holding ₹1.35 lakh of stock on average gives a GMROI of 2.22: each rupee in stock earned ₹2.22 of margin. Below 1 means the stock earns less than it costs, so cut slow items.
How to use this calculator
- Pick a period, such as the last quarter or year.
- Enter gross margin (sales minus product cost) for that period.
- Enter stock value at cost at the start and end.
Formula
Average stock = (opening + closing stock at cost) ÷ 2
GMROI = gross margin ÷ average stock
Use stock at purchase cost, not selling price.
Frequently asked questions
What is a good GMROI?
Above 3 is strong for many retail categories; 1 to 2 is weak. Compare products within your own catalogue.
How do I raise GMROI?
Sell slow items, reorder in smaller batches, and focus stock on high-margin fast sellers.
Is GMROI the same as inventory turnover?
No. Turnover counts how fast stock sells; GMROI counts how much margin that stock earns.
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