1: revenue definition
2: how revenue works
3: revenue vs sales
4: example of revenue
Opening information:
Revenue means received of certain income or receipt of money by selling a particular item or product or matter of something.
The received means from the consumer of the product or service for a business or organization of government rulers.
This article contains information about what is revenue, how revenue works, and the difference between revenue and sales, finally examples of revenue.
1: revenue definition
On the side of California, the person Mr.Mack had a running the best furniture business to the people’s.
To make furniture, the materials of wood are acquired from the forest side. He has not acquired or bought the wood from any other parties or any people.
He would have his employees go into the Forest and cut the necessary trees for their work.
But the trees are cut legally by having a government’s rights of license with required payments.
So the furniture which is made by the Mr. Mack business is completely had great quality compared to other business competitor’s.
He sold 1200 furniture sales each month and made a total amount of 350,000 dollars. Which made him a profit of 150,000$ with an expense of 200,000 dollars.
This is not an accurate sale which made by Mr. Mack’s business each month. The sales of the business might increase sometimes and decrease sometimes.
The 1200 furniture is the average minimum amount of furniture he sells to their customers each month. So Mack had stable sales on his business.
Here the total amount of 350,000 dollars from the net sales is called the revenue of the business. Which include the business expenses of $200,000 of employees’ salary, materials expenses, and rent of the stores. Which also includes the profits amount of $150,000.
So now let’s see how the revenue of the business would work in the stock market.
2: how revenue works
The revenue of the business is tracked on all the financial statements of the company and notified to Investors.
The financial statements are the income Statement, balance sheet statement, and cash flow statement. But the income Statement is the one which is part of the financial statement of the business.
This income statement occupied the revenue as a first line in its reports.
Without a reported revenue, public Investors of the publicly traded company couldn’t know the total amount of sales, Which are made from the business.
The Investor uses the revenue line amount to estimate and understand the difference between the profit and expenses amount.
Because without an underlying revenue, it wouldn’t be possible to subtract the total expenses of the business and profits.
So Investors use and compare the past revenue amount and Current revenue amount to understand and identify the growth of the industry sales over time.
Finding this helps the stock Investor understand the business well before they invest in it.
Moreover, the revenue of the business is reported every quarter and annually through two different reports for the shareholders of the business.
The two reports include the revenue of the business each time.
Which are called 10q and 10k in the corporate industries.
These reports need to be submitted to the Security and Exchange Commission website.
So any Investors had the authority to download and access the information that was submitted to the SEC.
Most Investors are confused about the revenue and sales of the business, so let’s take a different in it.
3: revenue vs sales
The difference between the revenue and sales is, that the revenue is the Total amount of acquired money from the business without subtracting any signal expenses and tax.
Sales are the word of sold goods or services of the total products or things in a corporate business.
Therefore the key difference between the sales and revenue is sales won’t occupy the received amount in the business but the revenue occupies the business received amount.
On the other hand the net sales, sales of goods and services, Sales amount, and revenue amount of business which also called revenue in the corporate business reports.
So Don’t confuse the revenue and sales, the sales word has had different meanings but the sales words became a part of the revenue, therefore sometimes businesses use the sales word as revenue in the business industries.
To make you more clear about revenue, let’s dive into one example.
4: example of revenue
Say you’re having a mobile industry. Which is considered as best recent mobile in your city.
You sold 260 mobile phones this month and you received a total amount of 100,000 dollars without subtracting any expenses.
Here 260 units are sales and 100 thousand dollars is the revenue of the business.
Market rule: #100124
Revenue is a market rule, where every company must report its revenue to the security and exchange commission at each quarter. But any decision investors take based on the revenue alone is completely responsible from their side.
If your investor and not comply or align investing based on market rules please learn about how to regulate your investments under your control with the use of Rule investing.