Differentiate between turnover and profit.
The major differences between turnover and profit are as follows −
Turnover
- Total amount of cash received from sales by a company in certain period.
- Also called as revenue, sales, topline.
- Turnover is the multiplication of unit selling price to number of units sold.
- It is the superior one and is independent of profits.
- Turnover/revenues from operations, Non-operating turnover/revenues are types of turnover.
- Present at top in income statement.
- Determines demands in market for products/services of a company.
Profit
- Cash available after accommodating costs like administration costs, depreciation, taxes etc.
- Also called as net income, net profits, profit after tax, bottom line.
- Profit is difference between turnover and costs.
- Product of turnover.
- Depends on turnover.
- Gross profits, net profits are types of profit.
- Present at bottom of income statement.
- Determines if company can sell its products/service to cover its expenses charged against turnover.
Published on 25-Sep-2020 17:24:53
