Gross Margin Return on Investment Calculator

✖Gross_Profit or Gross Revenue is the profit a company makes after deducting the costs associated with making and selling its products.ⓘ Gross_Profit [GP]			+10% -10%
✖Opening Stock also called Beginning Inventory, refers to the quantity held by a company at the beginning of the accounting period.ⓘ Opening Stock [S_o]			+10% -10%
✖Closing Stock is the amount of inventory that a business still has on hand at the end of a reporting period.ⓘ Closing Stock [S_c]			+10% -10%

✖Return_on_Investment_(ROI) is the ratio of a profit or loss made in a fiscal year expressed in terms of an investment.ⓘ Gross Margin Return on Investment [ROI]

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Formula

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Gross Margin Return on Investment

Formula

`"ROI" = "GP"/(("S"_{"o"}-"S"_{"c"})/2)*100`

Example

`"750"="7500"/(("5000"-"3000")/2)*100`

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Gross Margin Return on Investment Solution

STEP 0: Pre-Calculation Summary

Formula Used

Return_on_Investment_(ROI) = Gross_Profit/((Opening Stock-Closing Stock)/2)*100
ROI = GP/((S_o-S_c)/2)*100
This formula uses 4 Variables

Variables Used

Return_on_Investment_(ROI) - Return_on_Investment_(ROI) is the ratio of a profit or loss made in a fiscal year expressed in terms of an investment.
Gross_Profit - Gross_Profit or Gross Revenue is the profit a company makes after deducting the costs associated with making and selling its products.
Opening Stock - Opening Stock also called Beginning Inventory, refers to the quantity held by a company at the beginning of the accounting period.
Closing Stock - Closing Stock is the amount of inventory that a business still has on hand at the end of a reporting period.

STEP 1: Convert Input(s) to Base Unit

Gross_Profit: 7500 --> No Conversion Required
Opening Stock: 5000 --> No Conversion Required
Closing Stock: 3000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

ROI = GP/((S_o-S_c)/2)*100 --> 7500/((5000-3000)/2)*100

Evaluating ... ...

ROI = 750

STEP 3: Convert Result to Output's Unit

750 --> No Conversion Required

FINAL ANSWER

750 <-- Return_on_Investment_(ROI)

(Calculation completed in 00.004 seconds)

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Created by Kaki Varun Krishna

Mahatma Gandhi Institute of Technology (MGIT), Hyderabad

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National Institute of Information Technology (NIIT), Neemrana

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Gross Margin Return on Investment

Go Return_on_Investment_(ROI) = Gross_Profit/((Opening Stock-Closing Stock)/2)*100

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Gross Margin Return on Investment Formula

Return_on_Investment_(ROI) = Gross_Profit/((Opening Stock-Closing Stock)/2)*100
ROI = GP/((S_o-S_c)/2)*100

How does GMROI help ?

Tracking this metric on a monthly cycle helps in identifying which item produces a higher gross profit in the inventory.

How to Calculate Gross Margin Return on Investment?

Gross Margin Return on Investment calculator uses Return_on_Investment_(ROI) = Gross_Profit/((Opening Stock-Closing Stock)/2)*100 to calculate the Return_on_Investment_(ROI), The Gross Margin Return on Investment is indicative of the gross profit that is earned for every average investment that is made with regards to inventory. Return_on_Investment_(ROI) is denoted by ROI symbol.

How to calculate Gross Margin Return on Investment using this online calculator? To use this online calculator for Gross Margin Return on Investment, enter Gross_Profit (GP), Opening Stock (S_o) & Closing Stock (S_c) and hit the calculate button. Here is how the Gross Margin Return on Investment calculation can be explained with given input values -> 750 = 7500/((5000-3000)/2)*100.

FAQ

What is Gross Margin Return on Investment?

The Gross Margin Return on Investment is indicative of the gross profit that is earned for every average investment that is made with regards to inventory and is represented as ROI = GP/((S_o-S_c)/2)*100 or Return_on_Investment_(ROI) = Gross_Profit/((Opening Stock-Closing Stock)/2)*100. Gross_Profit or Gross Revenue is the profit a company makes after deducting the costs associated with making and selling its products, Opening Stock also called Beginning Inventory, refers to the quantity held by a company at the beginning of the accounting period & Closing Stock is the amount of inventory that a business still has on hand at the end of a reporting period.

How to calculate Gross Margin Return on Investment?

The Gross Margin Return on Investment is indicative of the gross profit that is earned for every average investment that is made with regards to inventory is calculated using Return_on_Investment_(ROI) = Gross_Profit/((Opening Stock-Closing Stock)/2)*100. To calculate Gross Margin Return on Investment, you need Gross_Profit (GP), Opening Stock (S_o) & Closing Stock (S_c). With our tool, you need to enter the respective value for Gross_Profit, Opening Stock & Closing Stock and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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