Formula
Revenue = Number of Units Sold × Price per Unit
Calculation Example
If a company sells 1,000 products at $50 each, total revenue is: 1,000 × $50 = $50,000
Data Source
Accounting records, sales reports, financial statements
Tracking Frequency
Daily, Weekly, Monthly, Quarterly, Annually
Optimal Value
Higher revenue generally indicates strong sales, but it should be analyzed with profit margins.
Minimum Acceptable Value
A company must generate enough revenue to cover its fixed and variable costs to remain operational.
Benchmark
Varies by industry: Retail businesses aim for high volume, while B2B services focus on long-term contracts.
Recommended Chart Type
Line chart (to track revenue over time), Bar chart (to compare revenue by product or region)
How It Appears in Reports
Usually presented as a total sum over a period, compared to previous periods or budgeted targets.
Why Is This KPI Important?
Revenue is a fundamental measure of business success, affecting profitability, investment potential, and sustainability.
Typical Problems and Limitations
Revenue alone does not indicate profitability; high revenue with high costs can still result in losses. Seasonal variations can also impact revenue trends.
Actions for Poor Results
Increase marketing efforts, adjust pricing strategies, expand into new markets, improve product offerings.
Related KPIs
Gross Profit, Net Profit, Customer Acquisition Cost (CAC), Sales Growth Rate
Real-Life Examples
A SaaS company introduced a freemium model, leading to a 25% increase in paid subscriptions and a revenue boost within six months.
Most Common Mistakes
Mistaking revenue for profit, ignoring revenue from different streams (subscriptions, one-time sales, etc.), and failing to track seasonal trends.
