KPI Library – Revenue

Revenue

Description:

The amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise. It is the “top line” or “gross income” figure from which costs are subtracted to determine net income. Revenue is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold.

 

Calculation:

Revenue is determined by the amount of sales made less the discounts and/or deductions for returned or refunded merchandise or services

 

Example:

For a fashion retailer this may be the number of items of clothes sold multiplied by the selling price less the number of items of clothes return multiplied by the selling price.