For those who are new to the concept of inventory turnover, let me start by explaining what inventory turnover is. Inventory turnover reflects how often your inventory is sold and re-purchased (turned over) within an accounting period. The formula is Inventory Turnover = Cost Of Goods Sold / Average Dollar Value of Inventory On-hand. Turning
GMROI, or Gross Profit Return on Inventory, answers the question “How much money do I get back for every dollar I invest in inventory?” The Gross Profit (or Gross Margin) that is created when you make sales needs to provide sufficient money to operate and grow your business and make a profit for the owners.
Unlike our other calculators, this one doesn’t automatically calculate answers for you. This topic is too important to automate the math; you really need to internalize this process. So, I have provided tables and a set of instructions Antique dealers often get into trouble by willy-nilly buying inventory without giving any thought to what they