Differences In Turnover And Profit, Complete By Counting And Examples

Profit illustration (Unsplash)

YOGYAKARTA Entrepreneurs must be able to understand the understanding and differences in turnover and profit in a business. Both are often considered as advantages, but turnover and profile have different calculations.

This article will provide information about different turnovers and profits in the business world so that entrepreneurs can manage their net profit.

According to the Big Indonesian Dictionary (KBBI), turnover is the amount of money obtained from the sale of goods during the selling period. Meanwhile, profit is interpreted as profit.

In general, it can be concluded that turnover is the amount of all income obtained from goods and services sales businesses in a certain period. Meanwhile, profit is profit obtained after the total income is reduced by other costs such as operations, bills, and so on.

Even though they both intersect with finances, turnover and profit are different. So what are the differences between the two?

Turnover is usually calculated based on the profits obtained in business in a certain period, it can be a month, two months, and so on. Turnover and profit have different way of calculating. The following is a simple formula for turnover and profit in a business.

Turnover = Selling Price x Number of units successfully sold

Profit = Omzet Operational Costs

Turnover is often referred to as a gross advantage because profits have not been reduced by other costs such as salaries, transport, and other bills needed in the business process. Meanwhile, profit is often referred to as a net profit because it has been reduced by other costs.

In financial reports, turnover and business are both listed in financial bookkeeping. However, the placement of the two is different. Usually the turnover column in a financial report is placed next to the top row because the cost of turnover still has to be reduced by other bill fees.

While the profit is placed in the last column because the value included in the bookkeeping has been reduced by various bills

Reporting from Investopedia, turnover and profit have different uses related to its use. Turnover is used to set production targets (based on unit sales projections). Meanwhile, profit is used by the management team in future capital development.

Turnover is not influenced by business bills such as salaries, transport, and so on. Meanwhile, profit is greatly influenced by other costs. The more other costs that must be paid, the installment of numbers that are considered as profits will continue to occur.

For example, a company that knows can sell tofu worth Rp. 30 million during the month of Ramadan 2024. In the same month the company was forced to add free daily workers so that the company knew it had to spend an employee salary of Rp. 20 million.

From this case, it can be said that Rp. 30 million is the turnover owned by the tofu company. Meanwhile, the profit obtained is the total proceeds from the sale obtained, minus the employee salary bill, so the profit is Rp. 10 million.

That's the difference between turnover and profit. Visit VOI.id to get more interesting information.