Turnover

Turnover is a term with several related meanings in business and finance. In many contexts it refers to the total revenue or sales a company generates during a specific period. In others it denotes the rate at which something within the organization changes hands, such as employees, inventory, or assets. Definitions vary by industry, jurisdiction, and the accounting framework used.

As a revenue measure, turnover is often used interchangeably with sales or gross revenue, though some definitions distinguish net turnover from gross turnover by excluding certain taxes or rebates. Turnover is a common input in financial analysis, used to assess company size, growth, and operating efficiency. Related turnover ratios include inventory turnover (cost of goods sold divided by average inventory) and asset turnover (net sales divided by average total assets).

Employee turnover describes the rate at which staff leave a company and are replaced. It is typically calculated as separations during a period divided by the average number of employees, expressed as a percentage. High turnover can raise hiring and training costs and affect organizational knowledge, while very low turnover may indicate other HR issues such as limited mobility; context matters and benchmarks vary by industry.

Turnover metrics are influenced by seasonality, business model, and market conditions, and comparisons should use appropriate benchmarks and adjusted figures to be meaningful.