Turnover

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DEFINITION of 'Turnover'

1. In accounting, the number of times an asset is replaced during a financial period.

2. The number of shares traded for a period as a percentage of the total shares in a portfolio or of an exchange.

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BREAKING DOWN 'Turnover'

1. In accounting, turnover often refers to inventory or accounts receivable. A quick turnover is desired because it means that inventory is not sitting on the shelves for too long.

2. In a portfolio, a small turnover is desired because it means the investor is paying less in commissions to the broker. It is called "churning" when a broker unethically generates numerous trades solely in order to increase commissions.

To learn more, check out "How do I calculate the inventory turnover ratio?"

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RELATED FAQS
  1. What does a high inventory turnover tell investors about a company?

    Inventory turnover is an important metric for evaluating how efficiently a firm turns its inventory into sales. Below is ... Read Full Answer >>
  2. How do I calculate the inventory turnover ratio?

    Managing inventory levels is important for most businesses and this is especially true for retailers and any company that ... Read Full Answer >>
  3. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  4. What are some examples of general and administrative expenses?

    In accounting, general and administrative expenses represent the necessary costs to maintain a company's daily operations ... Read Full Answer >>
  5. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
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