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/((So-Sc)/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/((So-Sc)/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)

Credits

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Mahatma Gandhi Institute of Technology (MGIT), Hyderabad
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13 Basics of Industrial Engineering Calculators

Single Exponential Smoothing
Go Smooth_Averaged_Forecast_for_Period_t = Smoothing Constant*Previous observed Value+(1-Smoothing Constant)*Previous Period Forecast
New Number in Simplex Table
Go New Number of Simplex Table = Old Number of Simplex Table-Key Row of Simplex*Key Column of Simplex/Key Number of Simplex
Expected Number of Customers in Queue
Go Expected Number of Customers in Queue = (Mean_Arrival_Rate^2)/(Mean_Service_Rate*(Mean_Service_Rate-Mean_Arrival_Rate))
Probability of Customers Exceeding Number
Go Probability of Customers Exceeding Number = Mean_Arrival_Rate*Exceeded Number Queuing Theory/Mean_Service_Rate
Number of Kanbans
Go No. of Kanban = (Demand_per_Year*Lead Time*(1+Safety_Factor))/Container Size
Expected Number of Customers in System
Go Expected Number of Customers in System = Mean_Arrival_Rate/(Mean_Service_Rate-Mean_Arrival_Rate)
Expected Length of Non-Empty Queue
Go Expected Length of Non-empty Queue = Mean_Service_Rate/(Mean_Service_Rate-Mean_Arrival_Rate)
Gross Margin Return on Investment
Go Return_on_Investment_(ROI) = Gross_Profit/((Opening Stock-Closing Stock)/2)*100
Perfect Order Measurement
Go Perfect Order Measurement = ((Total Orders-Error Orders)/Total Orders)*100
Uniform Series Present Sum of Money
Go Annual_Devaluation_Rate = Rate_of_Return_Foreign_Currency+Rate_of_Return_USD
Point r on Line
Go Point r on Line = Point a+Lambda*Point b
Non-Empty Queue Probability
Go Non-empty Queue Probability = (Mean_Arrival_Rate/Mean_Service_Rate)^2
Standard Error (Pooled)
Go Standard Error = (Mean Square Error^0.5)/Observations

Gross Margin Return on Investment Formula

Return_on_Investment_(ROI) = Gross_Profit/((Opening Stock-Closing Stock)/2)*100
ROI = GP/((So-Sc)/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 (So) & Closing Stock (Sc) 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/((So-Sc)/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 (So) & Closing Stock (Sc). 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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