ANNUAL TURNOVER Meaning and
Definition
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Annual turnover refers to the total sales revenue generated by a company within a specified time period, typically one year. It is a financial metric that helps measure the company's ability to generate sales and understand its overall performance. The calculation of annual turnover involves multiplying the average selling price of goods or services by the total number of units sold during the given period.
Annual turnover serves as a fundamental indicator of a company's business activity, providing insights into its market presence, sales effectiveness, and growth potential. It is often used by stakeholders, including shareholders, investors, and financial analysts, to evaluate the company's financial health and performance over time.
A higher annual turnover generally suggests that the company is successful in generating sales and effectively managing its assets. It implies an efficient utilization of resources, as it indicates that products or services are being sold and replenished in a timely manner. This can help the company cover its operating expenses, invest in growth opportunities, and generate profits.
On the other hand, a lower annual turnover may indicate poor sales performance or inefficiency in managing inventory. It could reflect a lack of demand for the company's offerings, ineffective marketing strategies, or excessive inventory holdings, tying up the company's resources and affecting profitability.
Overall, annual turnover is a crucial metric that provides a snapshot of a company's sales performance, helping stakeholders assess its operational efficiency, market competitiveness, and financial viability.
Common Misspellings for ANNUAL TURNOVER
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Etymology of ANNUAL TURNOVER
The word "annual turnover" originated from the combination of two distinct terms: "annual" and "turnover".
The term "annual" comes from the Latin word "annus", meaning "year". It entered the English language in the late 14th century, referring to something that occurs or is done once a year. It is derived from the Old French "annuel" or the Late Latin "annalis".
The word "turnover" emerged in Middle English in the late 14th century, derived from the phrase "turn over". It originally referred to the act of reversing or changing position, specifically in terms of rotation or flipping. Over time, it began to be used figuratively in the economic context, representing the process of selling and replacing inventory, or the total value of goods sold in a specific period.
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