{"id":298132,"date":"2025-10-21T16:14:01","date_gmt":"2025-10-21T04:14:01","guid":{"rendered":"https:\/\/www.reckon.com\/au\/?post_type=glo&p=298132"},"modified":"2026-05-05T17:06:30","modified_gmt":"2026-05-05T05:06:30","slug":"annual-turnover","status":"publish","type":"glo","link":"https:\/\/www.reckon.com\/au\/glossary\/annual-turnover\/","title":{"rendered":"Annual Turnover"},"content":{"rendered":"

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Annual turnover or business turnover is the total sales your business has generated over a financial year. This amount excludes expenses and costs of goods sold (COGS<\/a>). Annual turnover represents the output of your activities and is the starting point for many businesses to evaluate their operations.<\/p>\n

Annual turnover: meaning and why it is important<\/h2>\n

Annual turnover is the figure you first look at when you’re evaluating a business, as it is an expression of how valuable your business is. From turnover you can then evaluate the profit of your business via different methods, such as total income minus expenses (net profit<\/a>).<\/p>\n

While annual turnover is important, it only tells part of the story. High turnover doesn’t necessarily equate to a successful business. How you determine a stable business is by comparing turnover against specific metrics, such as costs to do business or other expenses. For instance, you could have high annual turnover (great), but your\u00a0operating margins<\/a>\u00a0are also high (bad), meaning that your profit is low, which could lead to poor cash flow. You should use annual turnover against other metrics, depending on the business activity.<\/p>\n

Other things that annual turnover assists with:<\/p>\n