Liikevaihdon

Liikevaihto, or turnover, is a central financial metric in Finnish accounting. The genitive form liikevaihdon appears in phrases such as liikevaihdon kehitys. In accounting terms, liikevaihto represents the total revenue generated from a company’s ordinary business activities during a financial period, primarily from the sale of goods and the provision of services. It is the top line on the income statement and excludes value-added tax (VAT) and other taxes collected on behalf of the state, as well as income from investments or non-operating activities.

Calculating liikevaihto involves taking the revenue from gross sales or invoiced amounts and adjusting for sales returns, discounts and allowances. Depending on the jurisdiction, certain other operating income that arises in the course of normal business may be included if it is directly linked to sales activities; most often, non-operating income is excluded.

Liikevaihto is used as a measure of company size and business activity and is the basis for several financial indicators, such as growth in turnover and margins expressed as a percentage of liikevaihto. It is distinct from profit, which is referred to as tulos or net income, and from gross profit, which is gross margin after the cost of goods sold.

In Finland, liikevaihto is reported consistently in annual accounts and taxation contexts, and the term is widely used in both Finnish and international financial reporting standards.