Annual turnover can have different meanings depending on the context. In the financial and business context, it generally refers to the total income or sales made by a business over a year. It is also known as "gross revenue" or "total sales" and is a key indicator of a company's performance. For example, in the investment context, annual turnover is the percentage rate at which a mutual fund or exchange-traded fund replaces its investment holdings on an annual basis
. In the context of business and accounting, annual turnover is the sales revenue collected over a 12-month period. It can also refer to the frequency that staff leave a business, the number of times a product is sold and restocked (inventory turnover), or how quickly payments are collected from customers (accounts receivable turnover)
. The formula for calculating the annual turnover rate in the context of employee turnover is:
Annual Turnover Rate=(Number of SeparationsAverage Number of Employees)×100\text{Annual Turnover Rate}=\left(\frac{\text{Number of Separations}}{\text{Average Number of Employees}}\right)\times 100Annual Turnover Rate=(Average Number of EmployeesNumber of Separations)×100
This formula is used to determine the percentage of employees who leave a company within a year
