The basic revenue definition is the total amount of money brought in by a company’s operations, measured over a set amount of time. A business’s revenue is its gross income before subtracting any expenses. Profits and total earnings define revenue—it is the financial gain through sales and/or services rendered.
Revenue is typically calculated by adding up all of a company’s standard earnings, in addition to gained interest and any equity increase accrued over the given time period
What is the formula for revenue?
The ability to accurately calculate and analyze revenue is essential to the financial success of any business model. Due to the complexity of the variables that are involved in this process, it’s wise to consult with an experienced accountant.
However, generally speaking, the first step of the process is to combine the entity’s total earnings, such as its profits. Next, factors like interest and equity must be added to the company’s earnings. Together, these figures should produce the company’s approximate revenue, from which various expenses and tax liabilities may then be deducted.