Differentiate between turnover and profit.

Banking & FinanceFinance ManagementGrowth & Empowerment

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.
raja
Published on 25-Sep-2020 17:24:53
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