What does turnover measure in a business?

Turnover specifically measures the total revenue generated by a business over a defined period, typically within a fiscal year. This figure represents the income a company earns from its core business activities, such as sales of goods or services, before any expenses are deducted.

Understanding turnover is essential for assessing a company's size, growth, and market position. A higher turnover indicates a robust business performance, showing that the company is effectively selling its products or services. In terms of financial health, turnover is a vital indicator because it can be analyzed alongside other metrics, like profits and expenses, to gauge overall business efficiency and profitability.

The other options do not accurately define turnover. For example, the number of employees reflects workforce size and labor costs rather than revenue. The number of transactions made signifies activity levels but does not translate directly to income levels. Lastly, total profit refers to the remaining income after expenses are deducted, which is different from turnover that looks solely at gross revenue. Understanding these distinctions helps clarify why turnover is directly linked to revenue measurement.