What is turnover?

Definition of Turnover

In accounting, the term turnover can have more than one meaning. In some countries turnover is used in place of sales. Turnover also pertains to certain financial ratios that relate a balance sheet (average) amount to an income statement amount.

Outside of accounting, turnover is used to express the rate at which a company has to replace the employees who leave the company.

Examples of Turnover in Financial Ratios

The following are a few of the most common financial ratios in which a turnover is computed:

In the case of financial ratios, a higher turnover ratio indicates a more efficient use of the company's assets.

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