Understanding Revenue | How to Calculate and Differentiate it from Profit in Mathematical Terms

What does revenue equal?

Revenue represents the total amount of money generated by a business or entity from its operations over a specific period of time

Revenue represents the total amount of money generated by a business or entity from its operations over a specific period of time. It is essentially the income earned by selling goods, products, or services to customers or clients. Revenue is calculated by multiplying the quantity of goods or services sold by their corresponding prices. In mathematical terms, revenue (R) can be expressed as follows:

R = Price per unit (P) x Quantity sold (Q)

For example, if a company sells 100 units of a product at a price of $10 per unit, the revenue would be:

R = $10 x 100 = $1000

It is important to differentiate between revenue and profit. Revenue represents the total inflow of funds, while profit is the amount left after deducting expenses from the revenue.

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