Gross Margin Return on Inventory Investment (GMSROI) is the gross margin earned per dollar of average inventory investment. A productivity measure that provides an indicator on the margin made for every dollar of average inventory. This measure helps business leaders to compare the margin potential of inventory investment across items or their merchandise hierarchy.
GMROI=Gross Margin / Average Inventory at cost (note Gross Margin and Average Inventory over the same period of time).”
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