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Financial Terms and Glossary

Revenue

Revenue

Revenue is the total amount of money generated by a business from its sales of goods or services before any expenses are deducted. It is also known as the top line because it appears at the top of a company’s income statement. Revenue is a key indicator of a company's operational performance and its ability to generate income. It is often analyzed to assess growth, sales efficiency, and the overall health of the business.

Example

A retail store generates $500,000 in revenue in one quarter from selling its products, which is recorded as the top-line figure on its income statement.

Key points

• Total income generated from sales of goods or services before expenses.

• Appears as the top line on a company’s income statement.

• A key indicator of a company’s operational performance and growth potential.

Quick Answers to Curious Questions

Why is revenue considered a key performance indicator for businesses?

It reflects the company’s ability to generate income from its core operations, indicating sales success and market demand.

How does revenue differ from profit?

Revenue represents total income from sales, while profit is the amount left after all expenses, taxes, and costs are subtracted from revenue.

What factors can influence a company's revenue growth?

Factors include market demand, pricing strategies, competition, and economic conditions.

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