What is the sales revenue formula?


Quick Answer

Sales revenue equals the quantity of units sold multiplied by the price of a single unit. For example, a pencil company that sold 22 pencils for $1 each has a sales revenue of $22.

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Full Answer

Sales revenue appears on an income statement and is referred to as sales or net sales. It is the amount of money made for selling products or services during the time interval indicated by the income statement. If a product is delivered after an exchange of money, it is considered a sale. Outstanding sales are not included in sales revenue, because either the exchange of money or the delivery has not yet taken place.

Sales revenue is not the same as gross profit. Sales revenue is the total amount of money earned, whereas gross profit is sales revenue minus the cost of goods sold.

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