![]() One of the crucial things is that the annual turnover is taken for a year, which may be a calendar year or a financial year. There are various points to be considered while calculating the company’s annual turnover. ![]() The different vital points are as follows: Usually, the company, stakeholders, and the general public consider the company’s net profit for analyzing the company’s well and the company’s position in the market instead of considering the annual turnover figure to conclude please health.Thus an annual turnover might be a biased figure however, considering quarterly or monthly amounts of turnover, a better and a logical conclusion can be drawn. Other times, a certain business earns tremendous profits only at a specified period.In a seasonal nature firm, annual turnover might not solve the purpose of showing the correct picture of the situation. Further, there increases rigidity while taking an annual figure.However, the total purchase price added to total expenses might increase turnover. Such demerits firstly include, it may so happen that the company sells enormous products every, crossing the mark of various competitors.Though in the literal sense, the term annual turnover might not be a criticizing topic however, there are some particular demerits of taking the turnover figures for decision-making purposes. Thus it shows the correct picture of how much the company has set a market base. Thus the net profit might be very high, but this doesn’t reflect accurately. Sometimes the company earns abnormal indirect income like speculative profit, while the company’s main business may be some other product.However, it can be seen that the net profit figure does not show the true picture of the entity and may sometimes be misleading. The net profit figure of any company is the amount obtained after deducting various expenses, both direct and indirect, and adding indirect and non-operating incomes to the annual turnover figure.This figure of a particular company of a particular year can be compared with the same product of another company for the same here, and steps should be taken to match the annual turnover with the competitive firm or to exceed the same. An annual turnover figure can also be used to maintain competitiveness among the entities.Or it can be compared with the annual turnover of another product for the same financial year calendar as the case may be. Since it is a periodic figure, the annual turnover figure can be compared by a company with the preceding financial year or calendar year, as the case may be. The annual turnover figure helps in comparison.It is a uniform figure, and uniformity can be maintained for various purposes in the business. It is a periodic amount showing the turnover over the financial year or the calendar as the case may be doing. ![]() The annual turnover indicates the market strength of a company and the image of such a company among the customers. It considers total earnings based on the quoted selling price and the number of products sold.
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