Turnover and profit represent a company’s revenue differently. Turnover, or net sales, is the pure income from a company’s sales. Profit means the turnover left after paying all expenses, both variable and fixed.
Turnover in Different Regions
Is turnover the same as revenue Australia?
In Australia, turnover means the same as sales revenue. It’s used more in Europe and Asia, while ‘revenue’ or ‘sales’ is common in North America. Turnover refers to the money from sales. This term suggests increasing revenue when it goes up. But it’s not profit; expenses must be covered first. Only normal business sales count towards turnover, not interest, subletting, selling assets, or money from investors. Turnover appears on the P&L statement under ‘sales revenue’. Annual turnover calculates sales revenue over 12 months.
Comparing Turnover and Revenue
Is turnover less than revenue?
Turnover and revenue often mean the same, particularly when sales generate income. However, turnover can include activities not making sales, like employee turnover. Revenue can also come from non-turnover activities. But, successful inventory turnover that generates revenue doesn’t directly lead to profit, especially if inventory is sold at low prices to move quickly.