TURNOVER
12 May 2016 By PDSNETA figure in the income statement of a company's financial statements which consists of the company's total sales or income figure - sometimes also called "revenue". This figure is very important because it shows the company's income over the accounting period. As an investor, you are interested in whether the company's turnover increased when compared to the previous period - and whether that increase was at least as much as the inflation rate. If turnover rises by less than the inflation rate during a year, then the company is going backwards. Turnover is the total cash brought in by the sale of the company's products or services. Retailers have some control over the prices that they charge for the products which they sell, but commodity companies usually do not. This makes the shares of companies that mine commodities difficult to predict. The prices of their products are set in international commodity markets and are completely out of their control. For example, Eastern Platinum (EPL) reported that in the 3 months to 30th September 2021 its turnover fell by 5,4%, but that in the 9 months to that same date, turnover was up by 30,5%. The company made a net loss which they said was due to, "...an increase in the foreign exchange loss as the South African Rand weakened against the U.S. Dollar". In its financials for the six months to 30th September 2023 Invicta (IVT) said the following about its turnover, "Revenue increased by R461 million (12%) from R3.8 billion to R4.3 billion, of which the South African operations contributed R178 million, the rest of Africa contributed R89 million, while Europe and America contributed the balance of R194 million. The weakening of the Rand from R19.81 to R23.48 for the GBP and R16.31 to R18.66 for the USD boosted revenue on translation". It is useful to study the breakdown of a company's revenue by geographical area or by product if it is given because it can give a good idea of where their main profit centers are.
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