Gross Margin Return on Inventory Planner methodology

grossMarginExTax = sales − cost of goods sold

periodGmroi = gross margin / average inventory at cost

annualisedGmroi = period GMROI × 365 / period days

targetGrossMarginExTax = average inventory at cost × target GMROI

targetGapExTax = target gross margin − gross margin

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

• All inputs must be finite and remain inside the visible validation boundaries.
• Whole-unit and whole-day fields reject fractional values.
• Percentages remain inside the closed range from 0% to 100%.
• Invalid denominators return an explicit unavailable result or fail closed; NaN and Infinity are never displayed.
• Cost of goods sold cannot exceed sales when gross margin is presented.

Sales minimum

salesExTax ≥ 0 currency units/period, ex tax — A lower value is rejected before calculation.

Sales maximum

salesExTax ≤ 10,000,000 currency units/period, ex tax — A higher value is rejected before calculation.

Cost of goods sold minimum

costOfGoodsSoldExTax ≥ 0 currency units/period, ex tax — A lower value is rejected before calculation.

Cost of goods sold maximum

costOfGoodsSoldExTax ≤ 10,000,000 currency units/period, ex tax — A higher value is rejected before calculation.

Average inventory at cost minimum

averageInventoryCost ≥ 0 currency units averaged over the selected period, at cost — A lower value is rejected before calculation.

Average inventory at cost maximum

averageInventoryCost ≤ 10,000,000 currency units averaged over the selected period, at cost — A higher value is rejected before calculation.

Period days minimum

periodDays ≥ 1 whole elapsed days/measurement period — A lower value is rejected before calculation.

Period days maximum

periodDays ≤ 100,000 whole elapsed days/measurement period — A higher value is rejected before calculation.

Target GMROI minimum

targetGmroi ≥ 0 gross-margin currency units/average inventory-cost currency unit — A lower value is rejected before calculation.

Target GMROI maximum

targetGmroi ≤ 1,000 gross-margin currency units/average inventory-cost currency unit — A higher value is rejected before calculation.

• All inventory, sales, cost, target, capacity and cash values are supplied by the user.
• Money inputs use one consistent ex-tax currency basis and records refer to the same cohort or planning period.
• The engine retains raw precision; display formatting never feeds back into calculation.
• No jurisdiction, provider fee, industry benchmark or current policy value is embedded.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

• Inventory valuation method, period length and target are user records or assumptions.
• Annualisation scales the observed period result and does not forecast seasonality or future margin.
• Zero average inventory makes ratio outputs unavailable instead of fabricating a return.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

1. 2026-07-16: Initial public release of the Gross Margin Return on Inventory planner and methodology.