Annual Turnover

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Definition of 'Annual Turnover'

Annual turnover, also known as annual sales or revenue, is the total amount of money a company brings in during a year. It is calculated by adding up all of the company's sales during the year. Annual turnover is an important metric for businesses because it can be used to measure their growth and profitability.

There are a few different ways to calculate annual turnover. The most common method is to add up all of the company's sales during the year. However, some companies may also include other income, such as interest income or rental income, in their calculation of annual turnover.

Annual turnover is a useful metric for businesses because it can be used to compare their performance to other companies in the same industry. It can also be used to track a company's growth over time. For example, if a company's annual turnover increases from $1 million to $2 million in one year, this indicates that the company is growing.

Annual turnover is also an important metric for investors because it can be used to assess a company's financial health. A company with a high annual turnover is generally considered to be more profitable than a company with a low annual turnover.

However, it is important to note that annual turnover is not the only metric that investors should consider when evaluating a company. Other important metrics include profit margin, return on equity, and debt-to-equity ratio.

Overall, annual turnover is a valuable metric for businesses and investors alike. It can be used to measure a company's growth, profitability, and financial health.

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