• Apophia

Understanding Sales Revenue Formula

Understanding sales revenue requires you to understand your business type or industry and generate sales; this is the start for every growing business.

For every business to succeed, you must make profits; profits are made only if the total revenue is greater than the total cost of producing and selling a commodity.

Revenue is crucial for your business; therefore, it's worth being understood perfectly and with all the aspects around it, including the different revenue types, keeping records and what you have to do with the revenue earned.

The most important and crucial thing for every business is to generate sales revenue, not simply providing services or goods; however, the more goods and services you provide/ sell out, the more sales you make and the more revenue generated in return.

As a business owner, you must make sure that your sales don’t go down; once sales go down, it implies that the sales revenue will also go down, which is not healthy for your business's survival.

Sales revenue refers to the amount of money realized by a business from the sale of goods or services. Alternatively, sales revenue refers to the amount of money that is brought into the business from the sale of products and/or services over a period of time.

Revenue is usually reported monthly, quarterly or annually. It indicates whether a company has profited or lost money over that time period. Keeping an eye on your sales revenue can help you manage, reduce costs and maximize profits.

Sales look at the number of goods sold out of the business, while revenue is earned from the sold products.

Sales revenue entails and price of a commodity and the quantity.

Price is therefore defined as the monetary value of a commodity. The unit cost/price of a commodity is attained by dividing the total cost by the quantity produced. On the other hand, quantity refers to the amount or number of items or commodities.

Sales Revenue = Price x Quantity

Mathematically it’s expressed as: