rate of turnover


rate of turnover
= turnover ratio
The frequency, expressed in annual terms, with which some part of the assets of an organization is turned over (i. e. replaced by others of the same class). In order to calculate how frequently stock is turned over, the total sales revenue (or if a more accurate estimate is needed the cost of sales) is divided by the average value of the stock. This provides a reasonable measure in terms of current assets Some accountants also divide the sales figure by the value of the fixed assets to arrive at turnover of fixed assets. This is hardly realistic, although it does express the relationship of sales to the fixed assets of the organization, which in some organizations could be significant. See also capital turnover; labour turnover rate

Big dictionary of business and management. 2014.

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  • rate of turnover — /ˌreɪt əv tɜ:nəυvə/ noun the length of time taken from the purchase of an item of stock to its replacement after being sold ● The rate of turnover is so low that some articles have been in the shop for more than a year …   Marketing dictionary in english

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