| Definition |
Total income from sales of goods/services before any costs or expenses. |
Remaining income after deducting all costs, expenses, debts, and taxes from revenue. |
| Also Known As |
Top line, Sales, Turnover |
Bottom line, Net income, Earnings |
| Formula |
Price × Quantity Sold |
Revenue – Total Expenses (COGS, operating, interest, taxes) |
| What It Shows |
Market demand, sales efficiency, pricing power |
Business sustainability, cost management, actual earnings |
| Can Be Positive/Negative |
Always ≥ 0 (can't be negative revenue) |
Can be positive (profit) or negative (loss) |
| Dependency |
Independent of costs |
Directly dependent on revenue AND costs |
| Primary Focus For |
Marketing, sales teams, growth investors |
CFO, accountants, value investors, creditors |
| Example (Simple) |
A bakery sells 100 cakes @ $20 → $2,000 revenue |
After $1,500 in flour, labor, rent, taxes → $500 profit |
| Misconception |
High revenue = High success (not true without profit) |
Low revenue = No profit (possible if costs are minimal) |
