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Can a firm have a negative turnover during a period of time? I'm asking this because I couldn't find any details on the web.

I am working with a data table that holds a lot of firms and their turnovers for each month. Some of them have negative turnover for one or more of the months.

Is that possible? How does a negative turnover work? How does it appear in the first place?

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  • $\begingroup$ Do you mean employment turnover, asset turnover, inventory turnover, or turnover of another sort? Please update your question to make it clear. $\endgroup$ – BKay Mar 28 '17 at 14:25
  • $\begingroup$ @BKay Turnover of a firm usually means its income from operations. $\endgroup$ – Adam Bailey Apr 27 '17 at 17:15
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One possible circumstance relates to firms undertaking long term contracts (eg for building or engineering work). Where a contract is uncompleted at the end of a period, the firm may (depending on its accounting policies) include in its turnover an amount reflecting its assessment of the work in progress. Sometimes unforeseen difficulties in completing a contract will subsequently come to light, and it may become necessary to include an offsetting reduction within turnover for the next period. If the contract is a large proportion of the firm's activity, then this could result in overall turnover for that period being negative.

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By issuing credit notes in the period higher in value than the invoices of the period. Typically, such credit notes correct mistakes or award overall discounts related to past periods, so they mess data up.

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