Description
Revenue is a company's earnings from regular business operations. It can be calculated as the sales price multiplied by units sold. Revenues are also known as a company's top line from which costs will be subtracted to arrive at net income.
Example
Revenue largely comes from sales of goods or services, interest earnings, dividend income, rental income, etc. An example of gross revenue is if a company sells 10 of its product subscriptions at $500 each, its gross revenue will be calculated as the price of product or services × units sold.Gross revenue = $500 × 10 = $5,000
Why it matters
A company's revenue can be analyzed to come up with the right pricing strategies, chalk out financial goals and create a budget. Since revenue features on a company's income statements, it is looked at closely by investors and stakeholders. Learning about a company's revenue can also help in predicting its future growth potential.