What is revenue?
Also known as turnover, revenue is the total amount of money that a business has taken in over a defined period, such as a year. Often this figure refers to sales, although it can relate also to revenue from trading, financial speculation or any money-spinning activity.
Where have you heard about revenue?
Company reports put revenue at the top of the page, hence its nickname 'the top line'. You may also have come across the revenue figure when a company is described as 'turning over' a certain sum of money. Revenue indicates the level of activity at which a company is operating.
What you need to know about revenue...
It is a figure that tells you how much money the business has earned during a specific period. Once costs such as wages, raw materials, utility bills and all the other expenses of doing business are deducted, what is left is the pre-tax profit, also known as 'the bottom line'. Investors are aware that there is little point in having a large revenue figure that yields little or no profit, but they value the top-line numbers as giving a good idea of the size and scope of a business performance over a specific period.