1. What is Turnover Percentage?

Turnover Percentage is a financial metric that measures the ratio of turnover (inventory or employee turnover) to sales, expressed as a percentage. It helps businesses assess efficiency in inventory management or employee retention.

2. How Does the Calculator Work?

The calculator uses the Turnover Percentage formula:

Where:

• \( Turnover \) — Total turnover amount (inventory or employee)
• \( Sales \) — Total sales revenue

Explanation: The formula calculates what percentage of sales is represented by the turnover, indicating efficiency or retention rates.

3. Importance of Turnover Percentage

Details: Turnover percentage is crucial for understanding operational efficiency. For inventory, lower percentages indicate better inventory management. For employees, optimal percentages vary by industry.

4. Using the Calculator

Tips: Enter turnover and sales amounts in the same currency (typically USD). Both values must be positive, with sales greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What's a good inventory turnover percentage?
A: It varies by industry, but generally 5-10% is considered efficient for retail, while manufacturing might aim for 2-5%.

Q2: How does employee turnover percentage differ?
A: Employee turnover percentage compares number of employees left to total workforce, not sales. This calculator focuses on financial turnover.

Q3: Should I use annual or monthly figures?
A: Use time periods that match your reporting cycle. Annual figures are most common for comparison purposes.

Q4: Can turnover percentage exceed 100%?
A: Yes, if turnover exceeds sales, indicating very inefficient operations or potential data issues.

Q5: How can I improve my turnover percentage?
A: For inventory: better demand forecasting, supplier management. For financial: increase sales or reduce unnecessary turnover costs.