Companies Act Section 2(91) Turnover

Turnover Tribunal Section 2(91)

1. Revenue Generation: 

Turnover represents the total income or sales generated by a company from its core business activities, excluding any taxes or other deductions.

2. Calculation: 

Turnover is typically calculated by summing up the total sales or revenue generated from the sale of goods or services, net of any returns, discounts, or allowances.

3. Financial Reporting: 

Companies are required to disclose their turnover in their financial statements, providing stakeholders with insights into the company’s revenue-generating capacity and performance.

4. Importance: 

Turnover is a key financial metric used for various purposes, including:

Performance Evaluation: It reflects the company’s ability to generate sales and revenue from its operational activities.

Financial Analysis: Investors and analysts use turnover to assess the company’s growth potential, profitability, and market position.

Regulatory Compliance: Turnover figures are crucial for determining the applicability of regulatory provisions and compliance requirements under company law.

Calculation Example:

For instance, if a company sells products worth ?1,000,000 in a financial year and records no returns or allowances, its turnover for that year would be ?1,000,000.