Turnover

Turnover

For 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 rate of 25% means that the value of trades represented one-fourth of the assets of the fund. For finance, the number of times a given asset, such as inventory, is replaced during the accounting period, usually a year. For corporate finance, the ratio of annual sales to net worth, representing the extent to which a company can grow without outside capital. For markets, the volume of shares traded as a percent of total shares listed during a specified period, usually a day or a year. For Great Britain, total revenue. Percentage of the total number of shares outstanding of an issue that trades during any given period.

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turnover

1. The trading volume of the market or of a particular security.

2. The number of times that an asset is replaced during a given period. For example, an inventory turnover of five indicates that the firm's inventory has been turned into sales and has been replaced five times.

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Turnover

1. In accounting, the number of times or the speed at which a company replaces an asset in a given period of time. This usually refers to the amount of time it takes for the company to collect its accounts receivable or the number of times it has to procure new inventory to replace that which it has already sold. Companies desire a fast or high turnover, as this indicates financial health.

2. The number of shares traded in a portfolio over a given period of time, expressed as a percentage of the number of shares in the portfolio. A low turnover means that the portfolio is not being very actively managed; it also means that one's broker is making less in commissions, as he/she is paid per trade. See also: Churning.

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Turnover

What Does Turnover Mean?

(1) In accounting, the number of times an asset is replaced during a financial period. (2) The number of shares traded in a specific period expressed as a percentage of the total shares in a portfolio or traded on an exchange.

Investopedia explains Turnover

(1) In accounting, turnover often refers to inventory or accounts receivable. A quick turnover is desired because it means that inventory is not sitting on the shelves for too long. (2) In a portfolio, a low turnover is desired because it means that the investor is paying less in trading commissions. Excessive trading by a broker for the sole purpose of generating commissions is called churning. This practice is both unethical and illegal.

Related Terms:
• Accounts Receivable—AR
• Asset
• Asset Turnover
• Cash Conversion Cycle—CCC
• Inventory Turnover