Turnover vs. Income — What's the Difference?
By Fiza Rafique & Maham Liaqat — Updated on April 4, 2024
Turnover refers to the total revenue generated from business operations, while income is the net profit after all expenses are deducted from turnover.
Difference Between Turnover and Income
Table of Contents
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Key Differences
Turnover, in the context of a business, represents the total sales or revenue generated by the company from its primary activities over a specific period, usually a fiscal year. It's a measure of the business's operational efficiency and market reach. Whereas, income, often referred to as net income or profit, is what remains after subtracting all the costs, including operating expenses, taxes, and interest, from the turnover. Income provides a clearer picture of the company's financial health and profitability.
While turnover gives an overview of the scale and scope of a company's operations, indicating the total value of goods or services sold, it does not account for the costs involved in generating that revenue. Income, on the other hand, reflects the company's ability to manage its expenses and efficiently generate profit from its turnover. It's a critical indicator for investors and stakeholders to assess the company's financial viability and operational success.
The calculation of turnover and income serves different purposes. Turnover is used to understand the size and growth of the business over time, helping in market analysis and strategic planning. Income, however, is crucial for assessing the company's financial performance, guiding investment decisions, and evaluating the effectiveness of management's strategies in generating profit.
Companies with high turnover might not necessarily have high income, as high operational costs, inefficiencies, or competitive pricing strategies can erode profits. Conversely, a company with moderate turnover but controlled expenses can achieve higher income, showcasing effective cost management and operational efficiency.
In financial reporting and analysis, both turnover and income are essential metrics. Turnover helps in understanding the business's market position and operational scale, while income highlights its profitability and financial health. Together, they provide a comprehensive view of a company's performance.
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Comparison Chart
Definition
Total revenue from business operations.
Net profit after deducting all expenses from revenue.
Reflects
Operational efficiency and market reach.
Financial health and profitability.
Importance
Indicates scale of operations and growth.
Shows company's ability to generate profit and manage costs.
Calculation
Sum of all sales/revenue.
Turnover minus all operational expenses, taxes, and interest.
Utility
Used for market analysis and strategic planning.
Critical for investment decisions and evaluating management success.
Compare with Definitions
Turnover
Reflects the extent of a company's market presence and customer base.
The diverse product range has notably expanded the company's market reach and turnover.
Income
The profit a company makes after deducting all expenses from its total revenue.
Despite higher turnover, the company's income was affected by increased production costs.
Turnover
The total sales or revenue generated by a company during a specific period.
The company's turnover increased by 20% last year, indicating significant growth in sales.
Income
Another term for income, highlighting the final profit after all deductions.
The net profit (income) this quarter exceeded expectations due to cost-saving measures.
Turnover
The primary component of turnover, representing income from sold goods or services.
The increased sales revenue contributed significantly to the company's turnover.
Income
Effective control of expenses to maximize income.
Through stringent cost management, the company enhanced its income despite market challenges.
Turnover
Turnover serves as a key indicator of business growth and market expansion.
The company's expanding turnover reflects its successful market penetration strategies.
Income
The ability to generate income from operational activities.
The company's profitability has improved, reflecting in its increased income.
Turnover
Indicates the size of a company's operations based on the volume of transactions.
The company's large operational scale is evident from its high turnover.
Income
A measure of how well a company uses its resources to generate income.
The annual report showed a strong financial performance, with significant income gains.
Turnover
The amount of money taken by a business in a particular period
A turnover approaching £4 million
Income
Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.For households and individuals, income is a sum that includes any wage, salary, profit, interest payment, rent, or other form of earnings received in a given period of time. (also known as gross income).
Turnover
The rate at which employees leave a workforce and are replaced
High staff turnover left the program with too many young instructors
An annual turnover of staff as high as 100%
Income
Money received, especially on a regular basis, for work or through investments
He has a nice home and an adequate income
Figures showed an overall increase in income this year
Turnover
A small pie made by folding a piece of pastry over on itself to enclose a sweet filling
An apple turnover
Income
The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as profit from financial investments.
Turnover
(in a game) a loss of possession of the ball to the opposing team
The team were sitting on their lead and taking care to avoid turnovers
Income
The act of coming in; entrance.
Turnover
The act or fact of turning over
Preventing the turnover of vehicles in accidents.
Income
Money one earns by working or by capitalising on the work of others.
Turnover
An abrupt change or transfer, as of power or ownership.
Income
Money coming in to a fund, account, or policy.
Turnover
A small pastry made by covering one half of a piece of dough with a filling, folding the other half over on top, and sealing the edges.
Income
(obsolete) A coming in; arrival; entrance; introduction.
Turnover
The number of times a particular stock of goods is sold and restocked during a given period of time.
Income
A newcomer or arrival; an incomer.
Turnover
The amount of business transacted during a given period of time.
Income
(obsolete) An entrance-fee.
Turnover
The number of shares of stock sold on the market during a given period of time.
Income
(archaic) A coming in as by influx or inspiration, hence, an inspired quality or characteristic, as courage or zeal; an inflowing principle.
Turnover
The number of things that are replaced by others of the same kind, or the rate at which this happens
The turnover of red blood cells.
A rapid turnover of hospital patients.
Income
A disease or ailment without known or apparent cause, as distinguished from one induced by accident or contagion; an oncome.
Turnover
The number of workers that have left a workplace or industry and been replaced in a given period of time, or the rate at which this happens.
Income
That which is taken into the body as food; the ingesta; sometimes restricted to the nutritive, or digestible, portion of the food.
Turnover
The ratio of this number to the number of employed workers in a workplace.
Income
A coming in; entrance; admittance; ingress; infusion.
More abundant incomes of light and strength from God.
At mine income I louted low.
Turnover
(Sports) A loss of possession of the ball or puck to the opposing team, as by a misplay or an infraction of the rules.
Income
That which is caused to enter; inspiration; influence; hence, courage or zeal imparted.
I would then make in and steepMy income in their blood.
Turnover
Capable of being turned or folded down or over
A turnover collar.
Income
That gain which proceeds from labor, business, property, or capital of any kind, as the produce of a farm, the rent of houses, the proceeds of professional business, the profits of commerce or of occupation, or the interest of money or stock in funds, etc.; revenue; receipts; salary; especially, the annual receipts of a private person, or a corporation, from property; as, a large income.
No fields affordSo large an income to the village lord.
Turnover
The amount of money taken as sales transacted in a given period.
The company had an annual turnover of $500,000.
Income
That which is taken into the body as food; the ingesta; - sometimes restricted to the nutritive, or digestible, portion of the food. See Food. Opposed to output.
Turnover
The frequency with which stock is replaced after being used or sold, workers leave and are replaced, a property changes hands, etc.
High staff-turnover can lead to low morale amongst employees
Those apartments have a high turnover because they are so close to the railroad tracks.
Income
The financial gain (earned or unearned) accruing over a given period of time
Turnover
A semicircular pastry made by turning one half of a circular crust over the other, enclosing the filling (usually fruit).
They only served me one apple turnover for breakfast.
Turnover
(sports) A loss of possession of the ball without scoring.
The Nimrods committed another dismaying turnover en route to another humiliating loss.
Turnover
A measure of leg speed: the frequency with which one takes strides when running, typically given in strides per minute.
Turnover
The act or result of overturning something; an upset.
A bad turnover in a carriage
Turnover
(dated) An apprentice, in any trade, who is handed over from one master to another to complete his time.
Turnover
Capable of being turned over; designed to be turned over.
A turnover collar
Turnover
The act or result of turning over; an upset; as, a bad turnover in a carriage.
Turnover
A semicircular pie or tart made by turning one half of a circular crust over the other, inclosing the fruit or other materials; as, an apple turnover.
Turnover
An apprentice, in any trade, who is handed over from one master to another to complete his time.
Turnover
Admitting of being turned over; made to be turned over; as, a turnover collar, etc.
Turnover
The ratio of the number of workers that had to be replaced in a given time period to the average number of workers
Turnover
Made by folding a piece of pastry over a filling
Turnover
The volume measured in dollars;
The store's dollar volume continues to rise
Turnover
The act of upsetting something;
He was badly bruised by the upset of his sled at a high speed
Common Curiosities
Which is more important, turnover or income?
Both are important: turnover indicates business scale and growth potential, while income shows profitability and financial health.
What is the difference between turnover and income?
Turnover is the total revenue from sales, while income is the profit after subtracting all costs from turnover.
How is income calculated?
Income is calculated by deducting all expenses, including operational costs, taxes, and interest, from turnover.
Can turnover affect a company's market value?
Indirectly, yes. High turnover can indicate growth potential, possibly influencing investor perception and market value.
Does high income mean a company is doing well?
High income usually indicates good financial health and operational efficiency, suggesting the company is doing well.
Can a company have high turnover but low income?
Yes, high turnover with low income can occur if the company has high operating costs, reducing profitability.
Is turnover the same as sales?
Yes, turnover often refers to the total sales or revenue generated by a company.
Why is turnover important?
Turnover is important as it indicates the scale of a company's operations and its market position.
What affects a company's income?
Income is affected by revenue, cost of goods sold, operational expenses, and efficiency in managing these costs.
What role does cost management play in increasing income?
Effective cost management can significantly increase income by reducing expenses and improving profitability.
How does market reach affect turnover?
Greater market reach can lead to higher turnover by expanding the customer base and increasing sales volume.
Do all companies report turnover and income the same way?
While there are standard accounting principles, specific reporting methods can vary by company and industry.
Is it possible for a company to increase income without increasing turnover?
Yes, by reducing costs or improving operational efficiency, a company can increase income even without a turnover increase.
How do investors use income and turnover?
Investors use income to assess profitability and financial health, and turnover to gauge company size and market position.
What strategies can a company use to improve its income?
Strategies include cost reduction, price optimization, market expansion, and operational efficiency improvements.
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Written by
Fiza RafiqueFiza Rafique is a skilled content writer at AskDifference.com, where she meticulously refines and enhances written pieces. Drawing from her vast editorial expertise, Fiza ensures clarity, accuracy, and precision in every article. Passionate about language, she continually seeks to elevate the quality of content for readers worldwide.
Co-written by
Maham Liaqat
