The Turnover Formula is a simple yet powerful accounting tool that helps businesses keep track of their financial performance. It gives business owners a quick snapshot of their company’s financial health by calculating their total annual sales revenue, subtracting the cost of goods sold and expenses, and dividing it all by their average assets held over the same period to get the turnover ratio. This number can be used to determine how quickly a business’s assets are being converted into revenue and accessed to monitor profitability. Keeping track of this data will help businesses make informed decisions to increase efficiency and optimize their bottom line.