Credit note & Inventory Profit Margin report

credit note ( items sales return ) does not reflect at Inventory Profit Margin report. is it normal ?

Yes. The Guide,, says β€œInventory Profit Margin tabulates profits and margin rates on inventory items sold during a period. Items not sold during the period are omitted.” It does not mention items returned.

When an inventory item is returned via credit note, its cost is transferred from the Inventory - cost expense account to the Inventory on hand asset account according to the cost(s) posted to Inventory - cost for the most recent sales of that quantity of the item (whether by sales invoice or receipt). Manager does not use the specific average cost applied when it was sold to the customer returning it. The Inventory Profit Margin report is limited to analyzing margins on sales. Depending on your point of view, you might think that is a limitation of the report. But it was designed as a sales report, not an overall profitability report.

I got your point @Tut .

in that case it must renamed to be INVENTORY SALES PROFIT MARGIN REPORT.

I don’t have a problem with credit notes being included in the calculations. Implemented in the latest version (21.1.51).