What is Share Turnover?

Share Turnover

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Share Turnover

“Share turnover” refers to the frequency with which a company’s stock is bought and sold over a specific period of time. It’s a measure of stock liquidity and is often used to gauge the trading activity or popularity of a company’s stock. A higher share turnover indicates more trading activity, which often suggests greater interest or attention from investors, while a lower turnover might suggest the opposite.

The formula for calculating share turnover is:

Share Turnover = Total Shares Traded / Average Shares Outstanding


  • Total Shares Traded is the sum of all shares bought and sold during the period.
  • Average Shares Outstanding is the average number of shares available for trading during the period. This figure can typically be found in a company’s quarterly or annual financial statements.

Example of Share Turnover

Let’s illustrate the concept of share turnover with a fictional example involving two companies in the same industry.


Imagine two companies in the renewable energy sector: GreenPower Inc. and EcoEnergy Ltd.

Over a specific year, here’s the trading data we have:

GreenPower Inc.

  • Total Shares Traded during the year: 15 million shares
  • Average Shares Outstanding during the year: 60 million shares

EcoEnergy Ltd.

  • Total Shares Traded during the year: 8 million shares
  • Average Shares Outstanding during the year: 40 million shares

Let’s calculate the share turnover for each company:

GreenPower Inc.
Share Turnover = 15,000,000 shares / 60,000,000 shares = 0.25

EcoEnergy Ltd.
Share Turnover = 8,000,000 shares / 40,000,000 shares = 0.2

From our calculations:

  • GreenPower Inc.’s share turnover for the year is 0.25 or 25%.
  • EcoEnergy Ltd.’s share turnover for the year is 0.2 or 20%.


Even though both companies are in the same sector, GreenPower Inc.’s stock was slightly more actively traded than EcoEnergy Ltd.’s stock during the year. This might indicate that investors were more interested or there was more news or volatility surrounding GreenPower Inc. during that period.

However, share turnover is just one of many metrics, and on its own, it doesn’t give a full picture. Investors would typically look at various other factors and metrics before making any decisions or conclusions about a company’s stock.

This example illustrates how share turnover can give insights into the trading activity of a company’s stock compared to its peers.

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