We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is Financial Turnover?

Malcolm Tatum
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

"Financial turnover" is a term that is utilized in a couple of different ways in the business world. One common use has to do with the amount of business volume that is generated within a specified time frame in relation to the profits that are generated within that same period. A slightly different form of financial turnover has to do with the relationship between the sales generated during a given period and the impact those sales have on the inventory of finished goods. With both applications, the basic idea behind financial turnover is to determine how efficiently some type of asset is being utilized in order to generate a desirable level of return.

Evaluating financial turnover often focuses on determining if the efforts used to produce a certain outcome are actually resulting in enough benefits to make the effort worthwhile. For example, if the focus is on the relationship between the amount of finished goods produced during a certain period versus the total amount of sales made during the same time frame, the desire is for a high turnover to occur and generate a significant amount of money for the firm. A high financial turnover in this scenario would mean that a large portion of the generated inventory would be sold to customers within the period under consideration, a situation that would be considered very desirable. With a low financial turnover, sales would lag far behind production resulting in a larger inventory at the end of the period, a situation that would not be in the best interests of the company.

As with other types of turnovers, companies want to find the ideal balance between utilizing their resources and generating revenue that in turn translates into a decent level of profit. In order to do this, analyzing the financial turnover from one period to the next can make it possible to adjust production as well as sales and marketing efforts so that the business is producing enough products to meet consumer demand, but not to the point that finished goods languish in warehouses for months. Since demand for many goods and services can shift due to factors such as seasonality, competition, or even changes in the general economy that impact how consumers spend their money, evaluating the financial turnover on a fairly regular basis is an excellent idea.

Businesses will sometimes use financial turnover in reference to how assets such as stocks and other securities held as investments are managed. In this scenario, the idea is to measure the level of turnover in the portfolio assets from one period to the next that is necessary to achieve the goals set for the returns earned by those investments. Depending on the nature of the investments involved, replacing some assets with others may be necessary in order to grow the portfolio. At other times, very little turnover is required, if all the assets involved are performing at acceptable levels.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum , Writer
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Discussion Comments

Malcolm Tatum

Malcolm Tatum


Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.