Meaning
Revenue is the total amount generated from selling goods or services before expenses.
Formula
Units sold x selling price, or total sales reported in the income statement
Practical reading
Rising revenue can show demand growth, but it is healthier when margins and cash flow also improve.
Calculation detail
For a simple product business, revenue is units sold ร selling price. Financial statements report it before operating expenses, interest and tax, so revenue is not the same as profit or cash received.
What to check
Read sales growth with price, volume and margin trends. That distinguishes growth driven by real demand from growth that comes mostly from price increases or acquisitions.
Limits and caveats
Revenue recognition rules, currency translation and acquisitions can reduce comparability between years.