Definition Turnover In Finance
The ratio of sales for a stated period to average inventory.
Definition turnover in finance. Overall turnover is a synonym for a company s total revenues. The turnover rate adjusts for the differences in outstanding shares and provides a measure of the relative activity in a stock. One common use has to do with the amount of business volume that is generated within a specified time frame in relation to the profits that are generated within that same period. The trading volume in a particular stock during a time period generally one year as a percentage of the total number of shares of that stock outstanding.
Financial turnover is a term that is utilized in a couple of different ways in the business world. Companies desire a fast or high turnover as this indicates financial health. This metric helps investors understand how effectively companies are using their assets to generate sales. Turnover is an accounting term that calculates how quickly a business collects cash from accounts receivable or how fast the company sells its inventory.
The number of shares traded in a portfolio over a given period of time expressed as a percentage of the number of shares in the portfolio. Turnover ratio depicts how much of a portfolio has been replaced in a year. Portfolio turnover is a measure of how quickly securities in a fund are either bought or sold by the fund s managers over a given period of time. Asset turnover is the ratio of total sales or revenue to average assets.
Some vehicles such as bond funds and small cap stock funds have naturally high turnover ratios. It is a term that is most commonly used in europe and asia. Noun the amount received in sales for a stated period.