Revenue is the total incomea company generates by the sale of goods or services that can be attributed to the company's core operations.
Revenueis often referred to as the “top line”because it appears at the topof the company'sincome statement.
Revenue isthe income a company generatesbefore any expenses are subtracted from the calculation.
A company reporting "top-line growth" is experiencingan increase in either gross sales or revenue or both.
Sales are the proceeds a company generates from sellinggoods or services to its customers:
In accounting terms, sales comprise one component of a company'srevenue figure.
On an income statement, sales are typically referred to as gross sales.
A company may also report net sales, which is the result of subtracting any returned merchandise from gross sales. Retail companies tend to report net sales as well as revenue.
Key Takeaways
Revenue isthe entire income a company generatesfrom its core operations before any expenses are subtracted from the calculation.
Sales are the proceeds a company generates from sellinggoods or services to its customers.
Companies may post revenue that's higher than the sales-onlyfigures due to supplementary income sources.
Revenue
Some companies inaccurately use the terms sales and revenue interchangeably. However, while sales are revenue, all revenue doesn't necessarily derive from sales.
For many companies, they are indeed the same. But some companies routinely derive additional revenue from their business operations.
Consider the following financial data from Exxon Mobil Corporation's (XOM) income statement for the quarter ending June 30, 2019:
Sales and operating revenues were roughly $67.5 billion for June 2019 versus $71.5 billion for June 2018.
Total revenue was $69 billion for the quarter ending June 2019 and $73.5 billion for the same period in 2018.
Revenues from other sources such as equity affiliates totaled more than $1.5 billion in 2019 and $2 billion in 2018.
Non-Operating Revenue
Companies such as Exxon post revenue that include both sales and income from supplementary sources.
Many companies generateadditional income from the sale of assets during periods when they’re cash poor. Other non-operating revenue gains may come from occasional events, such as investment windfalls, money awarded through litigation, interest, royalties, and fees.
Regardless of the source, these sporadic gains contribute to a company’s total cash flow.
Sales
Sales may be defined as money paid by customers. Sales are a company's core revenue for a given period.
Logically, revenue is the larger figure. However, total revenue for a period may occasionally be smaller than total sales.
Take, for example, a business that sells only hats. If the store's revenue formula deducts all discounted sales, returns, and damaged merchandise, the company's gross sales could be greater thanits revenue.
Government Sales
Governments use the term revenue to describe the money they collect from taxes, fees, fines, and publicly-operated services.
Government agencies also sell goods or services, from drilling permits to auctions of seized property. The proceeds from these activities are seldom referred to as government sales. They report all of their proceeds as revenue.
Key Differences
The difference between revenue and sales is relevant to investors viewing company reports.
A company's sales indicate the performance of its core business operations, while its revenue may be padded with one-time events like sales of property.
Whether it's sales, grosssales, net sales, or revenue, it’s critical to consider the industry in question, when analyzing a company’s financial data. It’s also important to distinguish between sales and revenue, because some revenuesources may be one-off events.
Investors are more likely to focus on sales. Most importantly, they compare sales for the period to sales from the previous period or from the period one year earlier. That number indicates whether a business is actually growing or contracting.
Revenue is the entire income a company generates from its core operations before any expenses are subtracted from the calculation. Sales are the proceeds a company generates from selling goods or services to its customers.
Revenue meaning is the money that is produced by carrying out normal business operations and is calculated by multiplying the average sales price by the number of items sold. It is the total sum of money from which other costs and expenses are subtracted to calculate net income.
“Revenue” refers to the total income a company earns over a specific time period. Revenue includes total sales, but it also may include income generated through non-sales activities such as investments, sale of assets, and allowances.
Revenue, often referred to as sales or the top line, is the money received from normal business operations. Operating income is revenue (from the sale of goods or services) less operating expenses.
Revenue, also known simply as "sales", does not deduct any costs or expenses associated with operating the business. Profit is the amount of income that remains after accounting for all expenses, debts, additional income streams, and operating costs.
Both represent an important way to understand your business. Revenue describes income generated through business operations, while profit describes net income after deducting expenses from earnings. Revenue can take various forms, such as sales, income from fees, and income generated by property.
Revenue is the total amount of income generated by the sale of goods or services related to the company's primary operations. Revenue, also known as gross sales, is often referred to as the "top line" because it sits at the top of the income statement. Income, or net income, is a company's total earnings or profit.
The sale of goods, products, or merchandise. The sale of services, such as consulting. Rental income from a commercial property (notice the use of “income”) The sale of tickets to a concert.
Revenue (sometimes referred to as sales revenue) is the amount of gross income produced through sales of products or services. A simple way to solve for revenue is by multiplying the number of sales and the sales price or average service price (Revenue = Sales x Average Price of Service or Sales Price).
Revenue is another word for the amount of money a company generates from its sales. Revenue is most simply calculated as the number of units sold multiplied by the selling price. Because revenues do not account for costs or expenses, a company's profits, or bottom line, will be lower than its revenue.
Consequently, revenue is commonly the greater amount. However, when sales income results in a greater value than the total revenue a business generates, it can mean the business has incurred more costs or expenses. The difference in value between revenue and sales can contribute to fluctuations in the net incomes.
A business's revenue is split into two main types: operating and non-operating. Operating revenue is derived from sales and services; in other words, it's the money a business earns from its core activities. Non-operating revenue can be seen as income on the side, or passive income.
In accounting, a company's gross revenue is its total gross sales over a certain period of time. It's all of the money the business received, not accounting for any expenses whatsoever. Net revenue, or net income, is equal to a company's gross revenue minus all of its expenses, including fixed expenses.
Sales returns are known as a contra revenue account and they have a direct effect on the net income, thereby reducing the income. They cannot be considered as an expense but they do contribute to the loss of income.
Revenue and profit are two of the most important numbers to focus on for business owners and stock investors alike. Revenue is the total amount of money the company has earned in a given period; profit is what's left after expenses have been deducted.
The basic revenue definition is the total amount of money brought in by a company's operations, measured over a set amount of time. A business's revenue is its gross income before subtracting any expenses. Profits and total earnings define revenue—it is the financial gain through sales and/or services rendered.
Revenue is used as an indication of earnings quality. There are several financial ratios attached to it: The most important being gross margin and profit margin; also, companies use revenue to determine bad debt expense using the income statement method.
Revenue is the value of all sales of goods and services recognized by a company in a period. Revenue (also referred to as Sales or Income) forms the beginning of a company's income statement and is often considered the “Top Line” of a business.
In accounting, the terms “sales” and “revenue” can be, and often are, used interchangeably to mean the same thing. It is important to note that revenue does not necessarily mean cash received. A portion of sales revenue may be paid in cash and a portion may be paid on credit, through such means as accounts receivables.
The net sales will be computed with the formula net sales = gross sales – returns – allowances – discounts. The net sales would be $90,000 - $500 - $100 - $1000 = $88,400.
The Sales Revenue—Products & Services report displays a list of items you sold in a selected period or date range. The report shows the item type (stock, non-stock, or service), quantity (or hours for services) sold, net sale amount, cost amount, profit amount, and profit percentage of each item.
Average revenue is referred to as the revenue that is earned per unit of output. In other words, it is the revenue that is obtained by the seller on selling each unit of the commodity. Average revenue of a business is obtained by dividing the total revenue with the total output.
Revenue is the amount of money that a business brings in, including income from sales and any additional income from bank interest or investments. A company can increase its revenue by increasing sales, adding other sources of income and increasing the amount of money that each sale produces.
Yes, sales is an excellent career. Salespeople have the potential to earn a high salary and often have a clear career path within their organizations. Most importantly, anyone can get into sales. You only need to have the drive to grow your sales skills and the desire to succeed.
Sales play a key role in the building of loyalty and trust between customer and business. Trust and loyalty are the main reasons why a customer would choose to recommend your company to a friend or family member or write a great review of your product or service online.
There are two main measures of revenue that companies use to gauge sales. Total revenue looks at the total sales as an average number per unit and then multiplies it by the number of units sold. By contrast, marginal revenue measures the money that a company will make per additional unit sold.
Total sales is a key performance indicator (KPI) used by sales departments to track the total amount of revenue generated from sales over a given period of time. It's also referred to as total revenue and is a good measure of business health.
Kids Encyclopedia Facts. Revenue (or revenues) is income that an organization receives from its normal business activities. In the case of a corporation this is usually from the sale of goods and services to customers. In the case of a government, revenue usually comes from various taxes.
Revenue is the earning that an enterprise has from its normal business pursuits, usually from the sale of commodities, and services to consumers. Revenue is also mentioned and referred to as turnover or sales. A few companies get revenue from royalties, other fees, or interests.
Revenues are the assets earned by a company's operations and business activities. In other words, revenues include the cash or receivables received by a company for the sale of its goods or services.
The total revenue figure is important because a business must bring in money to turn a profit. If a company has less revenue, all else being equal, it's going to make less money.
The 5 major sources of revenue for the Government are Goods and Services Tax (GST), Income tax, corporation tax, non-tax revenues, union excise duties .
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