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Turnover

• The number of times a given Asset (such as Inventory) is replaced during an accounting period, usually a year.

• Mutual Funds: A measure of trading activity during the previous year, expressed as a percentage of the average total assets of the fund. A turnover ratio of 25% means that the value of trades represented one-fourth of the assets of the fund. Finance: The number of times a given asset, such as inventory, is replaced during the accounting period, usually a year. Corporate: The ratio of annual sales to net worth, representing the extent to which a company can growth without outside capital. Markets: The volume of shares traded as a percent of total shares listed during a specified period, usually a day or a year. Great Britain: total revenue.

 
 Embedded terms in definition
 Assets
Asset
Average
Capital
Inventory
Listed
Mutual funds
Mutual fund
Net worth
Sales
Shares
Total assets
Total revenue
Trading
Volume
Without
 
 Referenced Terms
 Dupont formula: Multiplies the firm's net profit margin by its total asset Turnover to calculate the firm's return on total assets (ROA).

 Dupont system of financial control: Highlights the fact that return on assets (ROA) can be expressed in terms of the profit margin and asset Turnover.

 Inventory turnover: Measures the activity, or liquidity, of a firm's inventory.The ratio of annual sales to average inventory which measures the speed that inventory is produced and sold. Low Turnover is an unhealthy sign, indicating excess stocks and/or poor sales.This ratio shows how many times the units of inventory of a company are sold and replaced during an accounting period. The convention' is to divide sales by the inventory. However, it is more realistic to divide the cost of goods sold by inventory.

 Inventory turnover ratio: Is computed by dividing annual sales by inventories. It is usually desireable to have a relatively high inventory Turnover ratio relative to competitors.

 Short term solvency ratios: Ratios used to judge the adequacy of liquid assets for meeting short-term obligations as they come due, including (1) the current ratio, (2) the acid-test ratio, (3) the inventory Turnover ratio, and (4) the accounts receivable turnover ratio.

 
 Related Terms
 Accounts receivable turnover
Asset turnover
Fixed asset turnover
Fixed asset turnover ratio
Inventory turnover
Inventory turnover ratio
Portfolio turnover rate
Receivables turnover ratio
Total asset turnover

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