What is turnover?
Turnover refers to the total revenue generated by a business from its core operations over a specific period. It represents the value of all goods sold or services delivered before any costs or expenses are deducted.
Why is turnover important?
Turnover indicates the scale and activity level of a business. It helps assess growth, market demand, and sales performance. However, it does not reflect profitability, so it must be analysed alongside costs and margins.
How is turnover calculated?
Turnover is calculated by summing all sales revenue over a given period. This includes all income generated from primary business activities, excluding non operational income such as interest.
How does turnover differ from profit?
Turnover measures total income, while profit accounts for expenses. A business can have high turnover but low or negative profit if costs are high.
How do businesses increase turnover?
Businesses increase turnover by expanding customer base, increasing prices, launching new products, or entering new markets. Sales and marketing strategies play a key role in driving turnover growth.