Difference between revisions of "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 amortization0 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.


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== The top line ==
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A company's total revenue (or total sales) is always the first line on its balance sheet but is then often broken up into categories based on what each business division earned over the period.<ref>{{cite web|url=http://beginnersinvest.about.com/cs/investinglessons/l/blrevenue.htm|name=Total Revenue or Total Sales Investing Lesson 4 - Analyzing an Income Statement|org=BeginnersInvest|date=August 5, 2008}}</ref>
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However, not all companies agree on when revenue should be reported or even what constitutes it. Some, for examople, recognize and book revenue when a deal is signed, others when the moeny is received, still other when the serviuce ior good ids delivered.<ref>{{cite web|url=http://www.investorwords.com/4254/revenue.html|name=Revenue|org=InvestorWords.com|date=August 4, 2008}}</ref> Companies also recognize revenue differently depending on which accounting method they use.
 
Different companies also attempt to measure their revenue in the same way. Some, for example, prefer to report their operating income, which excludes any investment income or revenue from newly-purchased businesses or recently sold ones.<ref>{{cite web|url=http://www.msnbc.msn.com/id/7477449/
|name=What's the difference between revenue and income?|org=MSNBC|date=August 4, 2008}}</ref> Some publicly traded companies also try to exclude progressively more items from their operating income to artifically boost their bottom line.


== References ==
== References ==
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Revision as of 14:49, 6 August 2008

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 amortization0 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[edit]

A company's total revenue (or total sales) is always the first line on its balance sheet but is then often broken up into categories 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 examople, recognize and book revenue when a deal is signed, others when the moeny is received, still other when the serviuce ior good ids delivered.[2] Companies also recognize revenue differently depending on which accounting method they use.

Different companies also attempt to measure their revenue in the same way. Some, 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[edit]