Key Performance Indicators Examples
Revenue is the income that a business generates from its operations. It is the money received from the sale of goods or services, and it is the top line item on an income statement.
Revenue is also known as “sales” or “turnover” and it is important for a business as it is the main source of income for the company and it is used to cover expenses and generate profits.
The formula for revenue is as follows:
Revenue = Number of units sold x Price per unit
Revenue = Sales x Quantity
In this formula, “number of units sold” or “quantity” refers to the number of products or services that a business has sold during a specific period of time. “Price per unit” refers to the amount of money that a business charges for each product or service.
For example, if a business sells 100 units of a product at $10 per unit, its revenue would be 100 x $10 = $1,000.
It’s important to note that revenue only represents the amount of money that a business has brought in and does not take into account any expenses that the business has incurred in order to generate that revenue. To understand a business’s overall financial performance, it is necessary to also consider its costs and expenses.
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