Revenue is one of the most basic and fundamental financial figures for a company. It is the total amount of income from the sale of its products and/or services. Revenue is also known as gross income.
The calculation for revenue is:
- Sum (Price of Good x Quantity Sold)
I.e. the sum of the income generated from selling each unit.
Most of the figures in financial statement projections are based on a percentage of revenue. Although revenue in itself is very important for working out all the other figures of a company's financials, revenue in itself does not actually say anything about profitability.
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