What is Turnover? How to Find and Assess Revenue

Turnover is the value of goods and services a business sells during a period. In financial statements, you will often encounter the term as sales revenue or as part of operating income. Turnover indicates activity levels and size, but it does not alone tell if a company is profitable.

A company can have high turnover and still make a loss if its costs are even higher. Therefore, turnover should always be assessed in conjunction with profit, margins, cash flow, and development over time.

Turnover and Profit are Not the Same

Think of turnover as what comes in from sales before costs are deducted. Profit is what remains after relevant costs.

Example:

Here, the sales revenue can be referred to as a turnover of 12 million Norwegian kroner, while total operating income is 12.3 million. The operating profit is 1.2 million.

It is important that Proffi indicates which accounting entry is used. "Turnover" should not automatically be equated with all operating income if the company has significant other operating income.

Is Turnover with or without VAT?

In financial statements, sales revenue is normally accounted for without Value Added Tax (VAT). The VAT that the business collects on behalf of the state is not the company's income. When comparing, you must still ensure that the figures relate to the same period, currency, and accounting principles.

How to Calculate Turnover Growth

Turnover growth shows the change from one period to another:

Turnover Growth = (Turnover this year − Turnover last year) / Turnover last year × 100

If turnover increases from 10 to 12 million Norwegian kroner, the growth is 20 per cent.

Growth must be interpreted in context. It can result from more customers, higher prices, acquisitions, or currency fluctuations. Strong percentage growth from a very low base can also give a misleading impression.

Where to Find a Company's Turnover?

Companies subject to accounting obligations submit annual financial statements to the Regnskapsregisteret (Norwegian Register of Company Accounts). On Proffi, the information can be presented on the company profile with the financial year, currency, official source, and history.

Look for:

• Sales revenue
• Other operating income
• Total operating income
• Operating profit
• Annual profit
• Date and length of the accounting period

Be aware that not all businesses have the same reporting obligations. Many sole proprietorships (enkeltpersonforetak) are subject to bookkeeping requirements without submitting public annual financial statements to the Regnskapsregisteret. Therefore, a lack of public turnover does not necessarily mean that the business has no activity.

How to Assess Turnover?

Ask at least five questions:

1. Are revenues growing? Look at three to five years, not just two points.
2. Is profit growing simultaneously? Growth without profitability can be costly.
3. Is the growth organic? Acquisitions can make comparisons difficult.
4. Has the length of the accounting period changed? An 18-month financial statement cannot be directly compared with 12 months.
5. Is the currency the same? Show the original currency and any conversion separately.

Turnover per Employee

Turnover per employee can give a rough indication of productivity:

Turnover per Employee = Turnover / Average Number of Employees

This figure is most relevant between similar companies. Staffing models, temporary hiring, automation, and part-time positions can lead to significant differences. Therefore, use it as a point of comparison, not a definitive answer.

Common Mistakes

• Mistaking turnover for profit
• Comparing different currencies without marking
• Overlooking changed accounting periods
• Mixing company and group financial statements
• Comparing vastly different industries
• Using a single year as a trend

Find Turnover for Norwegian Companies

Search for a company or organisation number on Proffi. The company profile should show turnover, operating profit, annual profit, margins, and history with a direct link to the data source.