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Wondering how much your business could make this year—or if you’re charging the right price(s)? Use this simple revenue formula and calculator to get a quick estimate of your total revenue, which is all of the income your business earns from the products and/or services it sells (excluding production or other costs).Legal Disclaimer †
Total Annual Revenue = Items Sold Annually x Sales Price Per Item
For example, if you expect to sell 2,000 popsicles for $3 each in one year, your total revenue would be $6,000.
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How to Calculate Revenue FAQs
What is the difference between revenue and profit?
Revenue, for the most part, is the total amount of money your business takes in from the products and/or services it sells. It is also called gross sales or gross income.
Profit is the amount left after you deduct costs, expenses and taxes from your revenue.
How do I calculate total revenue?
To find out your total annual revenue, multiply the number of items sold annually and the sales price per item. If you have multiple items at different price points, you will need to do this for each item and then combine the totals.
What is the total revenue formula?
The total revenue formula is simple: Total Annual Revenue = Items Sold Annually x Sales Price Per Item.
What are the benefits of calculating revenue?
There are a couple of benefits of calculating your business revenue:
- Calculating your expected revenue provides a starting point of how much money will come into your business to cover all your costs both ongoing and operating.
- It can help you figure out how much profit you could make in a year, which is how much you could be taxed on at the end of the year. Simply subtract your production and other costs from your revenue to determine your profit.
- It helps ensure you have the right pricing strategy for your product or service. If your revenue is less than your production and other costs, you will need to adjust your pricing to cover costs and turn a profit.
Any recommendations are based on the accuracy and completeness of the information provided and are for illustrative and general information purposes only. This tool is not intended to provide specific financial, investment or other advice, and should not be relied upon in that regard. Royal Bank of Canada uses reasonable efforts to include accurate and up-to-date information in this tool, but cannot guarantee that all information is accurate, complete, or current at all times. Royal Bank of Canada does not make any express or implied warranties or representations with respect to any information or results in connection with the Revenue Calculator tool. Royal Bank of Canada will not be liable for any losses or damages arising from any errors or omissions in any of the information or results, as well as any action or decision made by you in reliance on any information or results.
The calculations provided herein are based on the information and values provided by the user. These calculations are intended for informational purposes only and are designed to provide a general indication. It is important to note that the results are purely indicative and should not be considered as definitive or binding. These calculations should not be considered as professional advice.
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