Financial statements · updated October 21, 2026
What is a company's revenue (sales)
Revenue, also called sales or turnover, is the total value of the products and services a company sold over a period, before any cost is subtracted. It is the first line of the income statement and shows how big the business is.
Revenue formula
- Quantity sold
- How many products, subscriptions or services the company sold.
- Average price
- The price collected on average for each one, after discounts.
Worked example
A coffee shop sells 200,000 coffees in a year at an average price of $3.
Out of that $600,000 it has to pay for the coffee, the rent, the wages and the taxes. What is left is profit.
How to read revenue
More important than the level is the growth rate, and whether it comes from selling more or just from higher prices. On our pages you can see sales growth over one year and over five years.
When revenue can fool you
Sales are not profit: a company with huge sales can still lose money. Bought growth: sales jump when the company buys another business, without selling more from its own. Exchange rates: a company that sells in dollars and reports in euros seems to grow or shrink just because of the currency.
Related terms
Learn it in the Academy
Questions about revenue
What is the difference between revenue and profit?
Revenue is everything the company sold. Profit is what is left after paying all the costs. A company with $100 of sales can have $10 of profit or even a loss.
What does organic growth mean?
Sales growth from the existing business, excluding companies bought and the effect of exchange rates. It shows how fast the company grows on its own.
These explanations are for information only. They are not a recommendation to buy or sell.
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