Revenue

Definition

Revenue is the money generated from selling goods and services in a business. Revenue is determined by adding up the sales of all items sold and deducting the value of all items returned. It is often used interchangeably with Sales, Top line, and Turnover

Why is it useful?

Revenue is one of the key fundamental indicators of business success. How much revenue a business has determines its capacity to serve, the value it provides, and whether the business will be viable. This metric is also used to calculate many important metrics for assessing business financial performance, such as Average Basket Size or Gross Profit Margin.

Example of Use

Revenue can be used to determine your day-to-day cashflow, and therefore the additional products or product development you can invest in to optimise or scale your business.

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