When analyzing the results of a company one come across the term annual turnover quite often, many people are confused about this term and that is the reason why one should know the meaning of this word. Annual turnover refers to total gross sales of the company during a period of 12 months; it is calculated by multiplying the price of the good or service and quantity of good or service. For example if a company which manufactures trousers and it sells 5000 trousers at $20 each then annual turnover for that company would be $100000.