Q:

What is revenue generation?

A:

Quick Answer

Revenue generation is the manner by which a company sells its goods or services to produce an income. This is not to be confused with a company's overall profits, as the two figures are drastically different.

Continue Reading

Full Answer

Revenue generation is the total amount of monies collected for the duration of a specified time. This amount of money is taken into consideration when analyzing the overall profit made from sales. Subtracting expenses from revenue provides a base number for profit margins. It is necessary to ensure that all expenses are included when subtracting from revenue generation. If not accurately subtracted, profit margins are drastically affected.

An accurate understanding of revenue generation also affects how a company is run. The number of employees, company supplies and physical assets affect how much revenue the business generates. Before calculating the net income of a company, the aforementioned expenses need to be subtracted from the revenue generated from sales.

Good bookkeeping is essential to ensure that all revenue generation is properly noted. Revenue generation affects the various types of government reporting and insurance requirements that companies are required to comply with. This also affects taxes that are owed to the government based on revenue. Documentation is key to reporting a company's revenue.

Learn more about Investing

Related Questions

  • Q:

    What is a revenue model?

    A:

    A revenue model is a system through which a business generates income from its products and services. The revenue model is a key component of any business model. It is a business plan that guides a company in generating income by creating value for its customers.

    Full Answer >
    Filed Under:
  • Q:

    When should you pull money out of a stock?

    A:

    You should pull money out of a stock when the issuing company has lackluster earnings or revenue, says Bloomberg Business. Keeping this in mind, investors should gauge all stocks dispassionately and without emotional attachment.

    Full Answer >
    Filed Under:
  • Q:

    What is a good asset turnover rate?

    A:

    It is better to have a higher asset turnover rate because it means the company is generating more revenue per dollar of asset, according to Investopedia. Since the ratio varies widely depending on the industry, it can only be compared with other firms in the same sector.

    Full Answer >
    Filed Under:
  • Q:

    How do I calculate gross private domestic investment?

    A:

    To calculate gross private domestic investment, subtract the nation's net exports from its GDP, subtract the government's gross spending from this sum, and subtract the combined value of all personal consumption, which includes what consumers spend on goods and services. There are a number of steps involved in calculating this figure, beginning with GDP and removing certain line items.

    Full Answer >
    Filed Under:

Explore