When the system calculates a product's gross margin return on investment (GMROI), it uses data for a 365-day period. If a product has less than one year’s data, the system estimates annual data based on the available information. This process is called "annualizing data." To determine how many times inventory turned over in one full year, run a GMROI Report for a 365-day period.
If you have products on the report with less than a year’s worth of data, the system uses the data of these products to project what you would do in one year if the trend continues. For example, if you have a product with six months of data, the system takes the cost of goods sold (COGS) and your gross profit for those six months and multiplies each one by two to produce values for annual COGS, annual sales, and annual gross profit.
This annualized data appears in the following columns on the reports:
Annual Sales$
Annual GP$
Annual COGS$
Note: When 365 days of data is used, annualized columns have the same values as the actual data columns. Otherwise, the annualized columns' values that are greater than the actual data columns.
Because some products in a price line or buy line can have less than one year's data, the system includes both annualized data and actual data on GMROI Reports.
When using a 365-day period on a GMROI Report, annualized values are the same as the corresponding product data.
When using less than a 365-day period, annualized values are greater than the corresponding product data.
See Also:
Consigned Inventory GMROI Report