Finance Management
Revenue Definition (B)
What is the Revenue and how is calculated? What is the importance of the Revenue as a Key Performance Indicator? How do we influence the growth of revenue?
Posted: Feb 2008
Revenue is the financial income in a certain period of time that is represented in financial value. It is calculated as number of units sold multiplied by unit price.
Revenue = Volume x Unit Price
Revenue is important indicator, but not the only since it does not include costs.
This means that the costs can be even higher than the revenue.
Since the Revenue is multiplication of Volume and Unit Price, it can be influenced by proper application of elements of Marketing Mix.
Volume can be grown by promotions, expansion of numerical distribution, balancing of product portfolio and proper Price Policy ( Affordable and Competitive Prices ).
