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Is this turnover??

Discussion in 'General Discussion' started by rs125, 12 Apr 2006.

  1. rs125

    Gangster

    Joined: 9 Sep 2005

    Posts: 498

    Location: Evesham

    Please could you use my example only because im getting bloody confused..

    I started buying and selling a few cars now have got to fill in a tax return...

    Now say i only bought and sold one car in last years tax year to make it simple.


    I buy a car for £1200
    Service costs me £200
    Total= £1400

    I sell the car for £1600..

    Now would my turnover be the £1600+£1400 so £3000??? (or am i missing something?)

    I tried ringing the help line but they just confused me more..Sorry if this is basics to some of you lot but this is my first tax return so dont want to mess it up..

    thankyou :)
     
  2. PhilthyPhil

    Mobster

    Joined: 19 Oct 2002

    Posts: 2,689

    Location: UK

    turnover=revenue (in Europe at least, I belive it has a different meaning in the US). In the case of yur example it would be £1600.
     
  3. rs125

    Gangster

    Joined: 9 Sep 2005

    Posts: 498

    Location: Evesham


    So what i paid for something is irrelevant?
     
  4. Vonhelmet

    Caporegime

    Joined: 28 Jun 2005

    Posts: 48,107

    Location: On the hoods

    Yes.

    Turnover is the amount of money that comes in.
     
  5. Badger2003

    Gangster

    Joined: 2 Jul 2004

    Posts: 309

    Location: York

    That's right....

    Using your example:-

    Your costs were £1400
    Your turnover was £1600
    Your profit / margin is £200

    Hope this makes sense
     
  6. UKDTweak

    Soldato

    Joined: 2 Dec 2002

    Posts: 6,592

    Location: N.Ireland


    Minus any expenses, thus £1400 from £1600 = £200

    Surley then the turnover = profit = £200 ?
     
  7. Vonhelmet

    Caporegime

    Joined: 28 Jun 2005

    Posts: 48,107

    Location: On the hoods

    No. Profit is turnover less expenses.
     
  8. zain

    Mobster

    Joined: 4 Jun 2005

    Posts: 3,773

    Google is your friend.
     
  9. daveyj27

    Wise Guy

    Joined: 18 Oct 2002

    Posts: 1,231

    Location: NH USA (Brit Expat)

    No, turnover is the gross amount that comes in. You then deduct costs from that to give the final profit (or loss) amount.
     
  10. dod

    Mobster

    Joined: 31 Oct 2002

    Posts: 3,882

    Location: Inverness

    Not quite, turnover is the value of sales made and invoiced, the money need not necessarily have been received.
     
  11. WillyNelson

    Soldato

    Joined: 28 Oct 2003

    Posts: 5,443

    Location: Worthington-on-sea

    No
    Yes

    Trust me, I'm an accountant.
     
  12. Desmo

    Soldato

    Joined: 18 Oct 2002

    Posts: 6,597

    Location: Chillin' on the Boat

    He's right you know :)
     
  13. spirit

    Wise Guy

    Joined: 18 Oct 2002

    Posts: 1,885

    In the US:
    turnover is the number of times a firm uses and rebuys its avg. inventory in a biz cycle

    In Europe:
    turnover is revenue which is amount of money that comes in from sales of g/s

    but in accounting revenue is something to do with liability and assets. I have no idea accounting is boring :D
     
  14. Lostkat

    Sgarrista

    Joined: 17 Oct 2002

    Posts: 8,106

    Location: Deepest Darkest Leics

    That also involves the word "turnover" in the UK. It's calculated using the "stock turnover ratio" which is sales/ave stock in period.

    It's easy to see why people get so confused with this sort of stuff, but it all makes sense once you've learnt it :)
     
  15. spirit

    Wise Guy

    Joined: 18 Oct 2002

    Posts: 1,885

    yeah but it all makes more sense in UK, but accounting is just plain confusing using income for revenue and other crazy wild ideas like that

    i knew it as just the turnover ratio = cost of goods sold/ave stock in cycle
     
  16. Lostkat

    Sgarrista

    Joined: 17 Oct 2002

    Posts: 8,106

    Location: Deepest Darkest Leics

    Ah see there's also an Asset Turnover Ratio, so you need to know which "turnover ratio" you're on about :D
     
  17. WillyNelson

    Soldato

    Joined: 28 Oct 2003

    Posts: 5,443

    Location: Worthington-on-sea

    You're mixing up the two fundamentals of accounting there, capital & revenue. Revenue has nothing to do with assets/liabilities. Assets and liabilities are Balance Sheet items, revenue is to do with Profit & Loss.

    The Accounting Equation: Capital = Assets - Liabilities

    The Business Equation: Profit = Income - Expenditure
     
  18. dod

    Mobster

    Joined: 31 Oct 2002

    Posts: 3,882

    Location: Inverness

    Are you sure??
     
  19. Lostkat

    Sgarrista

    Joined: 17 Oct 2002

    Posts: 8,106

    Location: Deepest Darkest Leics

    This all makes sense!!

    I have an exam on this in May, so it's all good :D
     
  20. WillyNelson

    Soldato

    Joined: 28 Oct 2003

    Posts: 5,443

    Location: Worthington-on-sea

    ACCA Yr 1 by any chance?