How To Calculate The Revenue

Total revenue is the amount of money that a business receives from the sale of its goods and or services over a period of time e g month year.

How to calculate the revenue. There are several forms of revenue including net and gross revenue as well as profits from various revenue sources. To calculate revenue you need to combine sources of income or revenue streams to find a total revenue number. Total gross revenue does not include any taxes paid for an item. There is a standard way that most companies calculate revenue.

Sales revenue units sold x sales price. In the most basic sense the revenue formula is. Learn more about financial management basics in this course. Calculating revenue is relatively easy if you know the price of your goods and how many were sold.

Before we get to the formula for calculating revenue let s make another revenue formula very clear. In economics total revenue refers to the total receipts from sales of a given quantity of goods or services. To calculate total revenue we multiply the quantity sold by the price of each of the items. Keeping good records of all transactions is the key to tip top financial management.

How to calculate percentages of total revenues scaling each company s operating profits to its revenue allows us to make a better like for like comparison with regard to company profitability. Put simply calculating revenue means multiplying the price of each product by the total number of units sold. Here s how you ll calculate total revenue for forecasting purposes. The sales revenue calculation is very simple.

The total revenue over the first quarter of the year can be calculated by adding up the revenue generated from all units of the business. If he regularly sells 50 pairs per month his total revenue is 5 000 100 x 50 5 000. If a boutique priced a blouse at 50 and it sold seven that puts total gross revenue for that product at 350. Total revenue quantity sold x price.

This is calculated before any discounts are applied. Take for example a leather craftsman who sells boots for 100 per pair. Total revenue gives a trader a jumping off point to further explore their pricing options. Regardless of the method used companies often report net revenue which excludes things like discounts.

So we add the revenue from the loaves of bread 30 000 with the revenue from croissants 6 000 and the revenue from spongecakes 1 000 to calculate the business s total revenue over the first quarter. Quantity x price revenue. How to calculate revenue.