A company’s revenue is crucial for the running of an organisation, whether it is a small business or a large business. There are two fundamental terms to remember when calculating a company’s revenue.Gross Revenue (includes expenses) = Selling price x Number of units sold.
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Bottom line
When an investor does the valuation of the company, he considers the net profit and net revenue before approving for funds. Hence, the net profit of a company should be higher than all kinds of expenses. Otherwise, it will reflect loss on the income statement.
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Power Words :
- Gross
- Revenue
- Profit
- Income
- Turnover
- Valuation
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