Revenue is the income that a business earns by selling merchandise or offering specific services. It is also referred to as sales or turnover. Revenue is calculated for a specific period like quarter or year. Revenue is calculated after adjusting for discounts and product returns.
Suppose between 1st Jan 2018 and 31st March 2018 Navya sells 10,000 pizzas and the price of each pizza is Rs.200, revenue earned during the quarter is Rs.20,00,000 (10,000 * 200).
Companies which are able to increase their sales year after year are desirable.
In case of industrial and utility companies total revenue is calculated as revenue from all of a company’s operating activities after deducting any sales adjustments.
In case of insurance company total revenue is the total insurance related premium that the company has earned during the period.
In case of banks, total revenue is the sum of interest and non interest income earned by the bank. Non interest income includes fees & commissions, credit card fees, foreign currency gains etc.