AN INTRODUCTION TO THE TURNOVER FORMULA.

When I asked around whether turnover could be estimated from the System of National Accounts everyone said no. And yet there was a kernel in Volume 2 which intrigued me where Marx first described duplicated value. He showed that the amount of duplication depended on the number of sales. If this was so then using this duplication the number of turnovers could be determined. Today that duplication is known. We have three series of sales; intermediate sales, final sales, and total sales. Total sales are the sum of intermediate sales plus final sales. Put another way the value of total sales (GO) is larger than final sales (GVA) because it includes the duplicated value. If final sales represent the actual value added during the course of production it must mean that intermediate sales represent the duplicated value added. Therefore the balance between intermediate sales and final sales must yield the rate of turnover. The bigger intermediate sales are compared to final sales the greater must be the turnovers and vice versa, and so it turned out when I uncovered and started using the formula:

G0/GVA + (GO-GVA)/GVA or alternatively GO/GVA + IS/GVA  [where GO stands for total sales, GVA for final sales and IS for intermediate sales].