1. What is Revenue?

Revenue is the total amount of money generated by the sale of goods or services related to the company's primary operations. It's often referred to as "top line" on financial statements.

2. How Revenue is Calculated

The basic revenue formula is:

Where:

• Price per Unit — The selling price of one item/service
• Quantity Sold — The number of units sold

Explanation: Revenue represents the total income before any costs or expenses are deducted. For businesses with multiple products, revenue is the sum of (price × quantity) for all products sold.

3. Importance of Revenue Calculation

Details: Revenue is a key metric for assessing business performance, determining growth trends, and making strategic decisions. It's the starting point for calculating profit (revenue minus expenses).

4. Using the Calculator

Tips: Enter the price per unit in dollars and the total quantity sold. Both values must be positive numbers. The calculator will compute the total revenue.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between revenue and profit?
A: Revenue is total income from sales, while profit is what remains after subtracting all expenses (profit = revenue - expenses).

Q2: Can revenue be negative?
A: No, revenue can't be negative since it represents sales. However, profit can be negative if expenses exceed revenue.

Q3: How is revenue different from income?
A: Revenue refers specifically to money earned from primary business activities, while income can include other sources like investments.

Q4: Why is revenue called the "top line"?
A: Because it appears at the top of the income statement, with all deductions (costs, expenses) listed below it.

Q5: How often should revenue be calculated?
A: Businesses typically calculate revenue monthly, quarterly, and annually for financial reporting and analysis.