Create Date: September 12, 2024
Last Modified Date: December 2, 2024
Revenue is one of the most basic and fundamental metrics in business and finance. Calculating revenue can simply be done by the following formula:
When you are evaluating your revenue it will be a single dollar amount. This value represents (should) the total amount of money your business brought in based on the sales of a specific item or service, or all of your items or services. When you get your revenue, for example, let's say it is $45,000, that means the total amount of money people spent on your products or services to you was 45,000. This number will not represent how much you get to keep or make, that is called profit.
Our revenue calculator is very simple and easy to use. There are just a few steps required to use it which includes:
Let's say you are selling a number of products online for the last year. You want to see how much revenue your shaker bottle product generated for your business. You sell them for $12 each and have sold 10,250 so far. To find your revenue you do the following: Revenue = 12 x 10250 to get a total revenue of $123,000.
Now let's say you offer digital marketing services and want to evaluate the revenue generated from your web design services. You charge a flat fee of $750 per website and sold 25 of them this year. To find the revenue generated from this service you would do: Revenue = 750 x 25 to get a total revenue of $18,750.
Revenue is the total number of dollars in sales while profit is specifically how much you made off of those sales. If you have revenue of $1,000 that means you sold $1,000 worth of product. The profit will not be this number, the cost of goods and other factors means you pocketed less. Profit is specifically the amount difference between the sales and cost of those goods.
Almost all the time income will not be higher than revenue but in some very rare instances it will be higher.
Revenue does not include any sales tax collected by the seller.
Revenue is a type of income, it is not a form of profit as the actual value for profit would be found after subtracting fees and operating costs from the revenue.
It is possible for a company to have no revenue. This would mean the company is not selling anything and not generating any cash inflow which can be devastating to the company if it continues for a while without the necessary backing. Many startups will experience no revenue at the beginning of their venture as it takes time typically for brands to be discovered and used by customers.
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