Business turnover, also known as gross revenue or top-line revenue, represents the total income generated by a business from its primary operations over a specific period (e.g., a quarter or a year). It's the figure before any expenses or costs are deducted. Understanding your turnover is crucial for assessing the scale of your business, tracking growth, and comparing performance against industry benchmarks.
What is Calculated Here?
This calculator focuses on a simplified model to help you understand the relationship between your revenue and key expenses. While "turnover" itself is typically just the total sales revenue, by including COGS and Operating Expenses, we can infer profitability derived from that turnover.
Key Terms:
Total Sales Revenue: This is the gross amount of money your business earned from selling goods or services before any deductions.
Cost of Goods Sold (COGS): These are the direct costs attributable to the production or purchase of the goods or services sold by your company. For retailers, this is the purchase price of inventory. For manufacturers, it includes raw materials and direct labor.
Operating Expenses (OpEx): These are the costs incurred in the normal course of business operations. They include expenses like rent, salaries, marketing, utilities, and administrative costs. They are distinct from COGS.
Gross Profit: Calculated as Total Sales Revenue minus COGS. This shows the profit before accounting for operating expenses.
Net Profit (or Loss): Calculated as Gross Profit minus Operating Expenses. This is the "bottom-line" profit after all costs and expenses have been accounted for.
How the Calculation Works
The calculator takes your provided figures and presents them in a clear context.
1. Input: You enter your Total Sales Revenue, Cost of Goods Sold, and Operating Expenses.
2. Gross Profit Calculation:Gross Profit = Total Sales Revenue - Cost of Goods Sold
The primary figure displayed is your Total Sales Revenue, as this is the direct definition of business turnover. However, the calculation of Gross Profit and Net Profit provides vital context about the profitability generated from that turnover.
Use Cases for Turnover Calculation:
Performance Tracking: Monitor how your total sales revenue changes over time.
Benchmarking: Compare your turnover against industry averages or competitors of similar size.
Financial Health Assessment: Understand the scale of your operations and the revenue generation capacity.
Loan and Investment Applications: Lenders and investors often look at turnover as a primary indicator of business size and market presence.
Pricing Strategy: Analyze revenue against costs to ensure your pricing is profitable.
Business Valuation: Turnover is a key metric used in valuing a business.
By regularly calculating and analyzing your business turnover and associated profitability, you gain essential insights for strategic decision-making and sustainable growth.
function calculateTurnover() {
var salesRevenueInput = document.getElementById("salesRevenue");
var costOfGoodsSoldInput = document.getElementById("costOfGoodsSold");
var operatingExpensesInput = document.getElementById("operatingExpenses");
var errorMessageDiv = document.getElementById("errorMessage");
errorMessageDiv.textContent = ""; // Clear previous errors
var salesRevenue = parseFloat(salesRevenueInput.value);
var costOfGoodsSold = parseFloat(costOfGoodsSoldInput.value);
var operatingExpenses = parseFloat(operatingExpensesInput.value);
// Input validation
if (isNaN(salesRevenue) || salesRevenue < 0) {
errorMessageDiv.textContent = "Please enter a valid positive number for Total Sales Revenue.";
return;
}
if (isNaN(costOfGoodsSold) || costOfGoodsSold < 0) {
errorMessageDiv.textContent = "Please enter a valid positive number for Cost of Goods Sold.";
return;
}
if (isNaN(operatingExpenses) || operatingExpenses salesRevenue) {
// We will still calculate, but warn the user as this implies a loss.
console.warn("Total expenses (COGS + Operating Expenses) exceed total sales revenue. This indicates a net loss.");
}
var grossProfit = salesRevenue – costOfGoodsSold;
var netProfit = grossProfit – operatingExpenses;
var resultValueElement = document.getElementById("result-value");
var resultUnitElement = document.getElementById("result-unit");
// Displaying Total Sales Revenue as the primary "Turnover"
resultValueElement.textContent = salesRevenue.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 });
resultUnitElement.textContent = "Total Sales Revenue";
// Optionally, you could add display for Gross and Net Profit if needed, perhaps in separate elements or a tooltip.
// For this calculator, we'll stick to the core definition of turnover being Sales Revenue.
}