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In business, revenue or turnover is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries and states, revenue is referred to as turnover. Some companies receive revenue from interest, royalties, or other fees.[1] Revenue may refer to business income in general, or it may refer to the amount, in a monetary unit, received during a period of time, as in "Last year, Company X had revenue of $42 million." Profits or net income generally imply total revenue minus total expenses in a given period. In accounting, revenue is often referred to as the "top line" due to its position on the income statement at the very top. This is to be contrasted with the "bottom line" which denotes net income.[2]

For non-profit organizations, annual revenue may be referred to as gross receipts.[3] This revenue includes donations from individuals and corporations, support from government agencies, income from activities related to the organization's mission, and income from fundraising activities, membership dues, and financial investments such as stock shares in companies.

In general usage, revenue is income received by an organization in the form of cash or cash equivalents. Sales revenue or revenues is income received from selling goods or services over a period of time. Tax revenue is income that a government receives from taxpayers.

In more formal usage, revenue is a calculation or estimation of periodic income based on a particular standard accounting practice or the rules established by a government or government agency. Two common accounting methods, cash basis accounting and accrual basis accounting, do not use the same process for measuring revenue. Corporations that offer shares for sale to the public are usually required by law to report revenue based on generally accepted accounting principles or International Financial Reporting Standards.

In a double-entry bookkeeping system, revenue accounts are general ledger accounts that are summarized periodically under the heading Revenue or Revenues on an income statement. Revenue account names describe the type of revenue, such as "Repair service revenue", "Rent revenue earned" or "Sales".[4]

Business revenue[edit]

Money income from activities that are ordinary for a particular corporation, company, partnership, or sole-proprietorship. For some businesses, such as manufacturing and/or grocery, most revenue is from the sale of goods. Service businesses such as law firms and barber shops receive most of their revenue from rendering services. Lending businesses such as car rentals and banks receive most of their revenue from fees and interest generated by lending assets to other organizations or individuals.

Revenues from a business's primary activities are reported as sales, sales revenue or net sales. This includes product returns and discounts for early payment of invoices. Most businesses also have revenue that is incidental to the business's primary activities, such as interest earned on deposits in a demand account. This is included in revenue but not included in net sales.[5] Sales revenue does not include sales tax collected by the business.

Other revenue (a.k.a. non-operating revenue) is revenue from peripheral (non-core) operations. For example, a company that manufactures and sells automobiles would record the revenue from the sale of an automobile as "regular" revenue. If that same company also rented a portion of one of its buildings, it would record that revenue as “other revenue” and disclose it separately on its income statement to show that it is from something other than its core operations. The combination of all revenue streams of a business is called revenue model.[6]

Financial statement analysis[edit]

Revenue is a crucial part of financial statement analysis. A company’s performance is measured to the extent to which its asset inflows (revenues) compare with its asset outflows (expenses). Net income is the result of this equation, but revenue typically enjoys equal attention during a standard earnings call. If a company displays solid “top-line growth”, analysts could view the period’s performance as positive even if earnings growth, or “bottom-line growth” is stagnant. Conversely, high net income growth would be tainted if a company failed to produce significant revenue growth. Consistent revenue growth, if accompanied by net income growth, contributes to the value of an enterprise and therefore the stock price.

Revenue is used as an indication of earnings quality. There are several financial ratios attached to it, the most important being gross margin and profit margin. Also, companies use revenue to determine bad debt expense using the income statement method.

Price / Sales is sometimes used as a substitute for a Price to earnings ratio when earnings are negative and the P/E is meaningless. Though a company may have negative earnings, it almost always has positive revenue.

Gross Margin is a calculation of revenue less cost of goods sold, and is used to determine how well sales cover direct variable costs relating to the production of goods.

Net income/sales, or profit margin, is calculated by investors to determine how efficiently a company turns revenues into profits.

Government revenue[edit]

Main article: Government revenue

Government revenue includes all amounts of money (i.e. taxes and/or fees) received from sources outside the government entity. Large governments usually have an agency or department responsible for collecting government revenue from companies and individuals.[7]

Government revenue may also include reserve bank currency which is printed. This is recorded as an advance to the retail bank together with a corresponding currency in circulation expense entry, that is, the income derived from the Official Cash rate payable by the retail banks for instruments such as 90 day bills. There is a question as to whether using generic business-based accounting standards can give a fair and accurate picture of government accounts, in that with a monetary policy statement to the reserve bank directing a positive inflation rate, the expense provision for the return of currency to the reserve bank is largely symbolic, such that to totally cancel the currency in circulation provision, all currency would have to be returned to the reserve bank and cancelled.

Association non-dues revenue[edit]

Association non-dues revenue is revenue generated through means besides association membership fees. This revenue can be found through means of sponsorships, donations or outsourcing the association's digital media outlets.

See also[edit]


  1. ^ Joseph V. Carcello (2008). Financial & Managerial Accounting. McGraw-Hill Irwin. p. 199. ISBN 978-0-07-299650-0.  This definition is based on IAS 18.
  2. ^ Williams, p.51
  3. ^ 2006 Instructions for Form 990 and Form 990-EZ, US Department of the Treasury, p. 22
  4. ^ Williams, p. 196
  5. ^ Williams, p. 647
  6. ^ "Revenue models". Dr. K.M.Popp. 
  7. ^ HM Revenue & Customs (United Kingdom) Office of the Revenue Commissioners (Ireland) Internal Revenue Service bureau, Department of the Treasury (United States) Missouri Department of Revenue Louisiana Department of Revenue

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Wall Street Journal

Wall Street Journal
Wed, 20 Aug 2014 13:17:58 -0700

However, Ms. Whitman cautioned that the revenue growth may not last. "I don't know that we've turned the corner," she said, adding that it might be tough to exceed the financial results from a strong fiscal fourth quarter one year ago. H-P doesn't ...


Thu, 21 Aug 2014 13:26:15 -0700

After the bell, Salesforce reported its fiscal second quarter financial results, including revenue of $1.32 billion and non-GAAP earnings per share of $0.13. The company beat estimates in the fiscal 2015 quarter, as investors had expected it to earn $0 ...
Thu, 21 Aug 2014 11:22:30 -0700

A majority of firms — 56.5% — indicated that the most important short- and long-term goal of their written strategic plan was developing new revenue. In this list, we rank what the top-performing firms in our study said were their most successful ...


Thu, 21 Aug 2014 06:34:16 -0700

The company pointed out that the revenue decrease included the Lands' End spinoff it completed in April, as well as of closed Kmart and Sears locations accounting for $330 million and $256 million worth of declines respectively. Continued weakness at ...
Wall Street Journal
Thu, 21 Aug 2014 13:44:33 -0700

Excluding stock-based compensation and other items, the adjusted loss from continuing operations was one cent a share. Revenue jumped 13% to $714 million. The company in May had forecast per-share earnings of six cents to eight cents on revenue of ...
The Times-Picayune - NOLA.com
Thu, 21 Aug 2014 16:03:45 -0700

The state's tax revenue collection was down 13.5 percent at the beginning of 2014 when compared to its level at the beginning of 2008. Louisiana is hardly alone in this respect. Twenty-six states haven't seen tax collection revenue return to 2008 levels.
Thu, 21 Aug 2014 15:30:00 -0700

Li & Fung Ltd., a key middleman in the global apparel supply chain, reported first-half revenue that fell short of consensus estimates and warned that U.S. and European retail sales are likely to remain "challenging." The Hong Kong-based company, which ...
Wall Street Journal
Thu, 21 Aug 2014 02:27:18 -0700

MELBOURNE, Australia—Australia's biggest banks recently posted record earnings in their recent trading updates, but some investors think the party is set to get a little quieter as the economy regathers itself. "We're definitely more cautious in terms ...

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