The turnover of a company refers to the total value of goods and services that it sells during a particular period. So, if a company states that its annual turnover was €5 million last year, this means that it sold goods and/or services worth €5 million in its most recent financial year (which could be the calendar year January-December or another period permitted under the laws of a particular country).
The term turnover is used particularly in the UK and by European Union institutions to refer to the total sales of a company. In the United States, for example, the terms revenue or sales would be used instead. Note that, unless the reference is to the company’s net turnover, no VAT or other deductions have been made from the figure quoted.
The turnover of a company is often used to measure the size of a company, for example in the context of competition law. Mergers and acquisitions are regulated by competition law because they may concentrate economic power in the hands of a smaller number of parties, which can be harmful to consumers, the economy and society as a whole. Therefore, certain large mergers and acquisitions have to be notified to competition authorities, who will then examine the merger to determine whether it would be harmful to competition, and either approve or block the merger. At European level, mergers and acquisitions must be notified to the European Commission where the annual turnover of the combined business exceeds a worldwide turnover of over EUR 5000 million and EU-wide turnover of over €250 million.