Turnover has grown: how much comes from prices and how much from the quantities sold
8 November 2026, 08:07
On 6 November the Bank of Italy published its business outlook survey of industrial and service companies with at least 20 employees. Of the firms surveyed, 46 per cent report higher turnover in the first nine months of 2026 and 19.8 per cent lower; the note points out, however, that growth is measured at current prices and that a sharper rise in price lists contributed to it, while dearer energy raised purchasing costs and reduced profit margins.
Anyone running a company, reading these figures, wonders what their own rising turnover actually means: are they selling more, or does each piece simply cost more to whoever buys it? The two answers lead to opposite decisions, and the financial statements do not tell them apart.
The same turnover can come from two different kinds of growth
Turnover is the product of two quantities: how many pieces, kilos, metres or hours are sold, and at what price. If it rises, the final figure does not reveal whether it was the first or the second that grew. Price lists 6 per cent higher, with quantities unchanged, raise sales as much as 6 per cent more pieces at the usual prices.
For the business, however, the two kinds of growth are nothing alike. Extra volumes require more raw material, more machine hours, sometimes more people, and they are a sign that customers are buying more. A price rise, on the other hand, often follows costs: when suppliers put their prices up, the company adjusts its price lists so as not to lose money on every delivery. If growth comes entirely from prices, the company has not sold more: it collects more for the same quantity, and it remains to be checked whether that adjustment covers the suppliers' increases, exceeds them or falls short.
The separation is made by recalculating sales at last year's prices
The quantities sold in the first nine months of 2026 are taken item by item and multiplied by the average price at which each item was invoiced in the same months of 2025. The result is an intermediate turnover, the one the company would have achieved had price lists stayed still. The difference between this value and the previous year's turnover is the quantity effect; the difference between actual turnover and the intermediate value is the price effect.
An example. A cardboard packaging manufacturer goes, in the first nine months, from €12 million to €13.2 million in sales. At the previous year's average prices, its deliveries are worth €12.2 million: the quantity effect is €200,000, and all the rest of the growth comes from price lists.
The data for the calculation are already in the company
The management software records, for every invoice line, the item sold, the quantity and the amount, and the sales statistics by item, which the accounts department already extracts for other purposes, give the quantities and the average price for each period: all it takes is to put the two years side by side in a spreadsheet and multiply. New items, which did not exist the year before, have no price to be compared with and are kept on a separate line. Companies that work to order, where the same item never comes back identical, use the unit of the quotation instead of pieces: kilos, processing hours, square metres.
Two mistakes are common. The first is to use the list price instead of the price actually invoiced: an 8 per cent increase accompanied by larger discounts to the main customers may, in practice, be worth much less. The second is to reason on the total: if a company sells less of a cheap product and more of an expensive one, its average price rises even with price lists unchanged. This is the change in the sales mix, and it shows up only by working item by item, or at least by product family.
That separation changes the decisions of the coming months. Those who discover that growth is made almost entirely of prices have no reason to hire in production or to enlarge a department, and they know that those prices may fall: when purchasing costs drop, the main customers are the first to ask to return to the old price lists. Those who instead find growth made of volumes must ask whether plant capacity and staff are enough to sustain it. The same calculation, repeated for the ten most important customers, distinguishes those who really buy more from those who merely pay more, and in controlling it becomes a permanent column in the monthly comparison with the previous year.
It pays to do the calculation now, on the first nine months already closed, because the 2027 budget will be written on those figures in the coming weeks: mistaking growth driven by price lists for volumes means planning purchases, shifts and hiring for work that customers have not asked for.
This article was prompted by a news item published in ANSA on 6 November 2026.