Revenue

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Revenue refers to the total amount of money received by a company from all its business activities, before expenses, within a timeframe. Investors and analysts commonly refer to revenue as EBITDA (earnings before interest, taxes, depreciation and amortization) but it is also called sales, income or gross income. Expenses subtracted from revenue gives the company's bottom-line profit figure, sometimes called net income.

The top line

A corporation's total revenue (or total sales) is always the first line on its balance sheet but is then often broken up into categories below that based on what each business division earned over the period.[1]

However, not all companies agree on when revenue should be reported or even what constitutes it. Some, for example, recognize and book revenue when a deal is signed, others when the money is received, still others when services or goods are delivered.[2] Companies also recognize revenue differently depending on which accounting method they use.

Different companies also sometimes attempt to measure their revenue differently. Many, for example, prefer to report their operating income, which excludes any investment income or revenue from newly-purchased businesses or recently sold ones.[3] Some publicly traded companies also try to exclude progressively more items from their operating income to artifically boost their bottom line.

References

  1. Total Revenue or Total Sales Investing Lesson 4 - Analyzing an Income Statement. BeginnersInvest.
  2. Revenue. InvestorWords.com.
  3. What's the difference between revenue and income?. MSNBC.