Turnover | Habefast
Turnover is the sum of sales of goods or services by a business.
Turnover: definition
It is calculated by multiplying the selling price and the quantity of goods or services sold. It is a figure that can be used to measure the market share of companies.
It can be monitored and analyzed on a monthly, quarterly or annual basis and allows a company to measure its performance. Turnover therefore gives an indication of the evolution of a company’s activity over time but also over space. By comparing the sales figures of the different shops of the same company, it becomes possible to adjust its marketing strategy and/or its location to attract more customers.
The value of turnover for a company:
- Calculating performance
In order to measure the adequacy of its supply and demand, a company needs to evaluate its sales. This allows it to adjust its offer and its commercial strategy. When is the turnover highest? Which offers have increased the turnover.
It can, for example, compare it with the average turnover in the sector to see if its offer is competitive and of interest to its customers. The calculation of turnover also helps the company to anticipate economic developments. By calculating its forecast turnover, the company can anticipate the increase in its production costs but it can also anticipate its sales.
- Calculating forecast turnover
It is also possible to calculate a company’s projected turnover. This allows the company to estimate its future income and sales. It helps to set the selling price and volume to be sold to ensure a profit.
Turnover and profit, what is the difference?
Turnover is an accounting figure. A distinction is made between gross and net turnover. That is to say, turnover excluding tax and including all charges.
To calculate a company’s profit, all the costs generated by the production of the product and the various charges must be subtracted from the turnover. If the result is positive, it is called a profit.
