What is revenue and example?
In business, revenue is the amount of money received by a company from its activities, mostly from the sale of products and/or services to customers. For investors, income is less important than profits, which is the amount of money received after deducting expenses.
Revenue growth is an important indicator of market revenue from the company’s products and services. Consistent revenue growth, and also profit growth, are seen as important for companies sold to the public through shares to attract investors.
What are the types of revenue?
1. Active Revenue
This income is the monthly income derived from the work. Examples of active income include salary, benefits, bonuses. A person can have an active income from more than one source, if he is able to work from two or more types of work activities, such as running a side job, running an entrepreneur, and others.
2. Investment Income or Portfolio Income
As the name implies, eating investment income is a producer that comes from investment returns. For example, mutual fund investments, stocks, bonds, and others. A person can invest by investing an amount of money or capital according to his ability, and get a profit from the money invested. The greater the capital invested, then it is likely the more income from the investment. The income from this investment is usually directly proportional to the risk of the investment.
3. Passive Income
Passive income comes from systems that have worked, for example, multi-level marketing businesses, property rental businesses, franchisors, patents, and others. With the system that is run, it does not mean that someone does not make an effort to get income. To generate passive income, a person must still try to run the existing system so that the financial rate continues to run and generate income. Examples of the home rental business, someone must do renovations from the house they have, so it is feasible to live in by the tenant.
To increase monthly income, some people can do a combination of several activities in order to increase the coffers, in addition to the usual main income that is routinely received. That way, the income can be derived from a combination of the 3 types of income mentioned above.
What makes up revenue?
For most people, income is most often received in the form of wages or salaries. To get it, of course, you have to do something first. For example, like working at a company, the company will pay in cash later.
In business, income can refer to the remainder of a company’s income after paying all fees and taxes. Revenues will not be received in full because the company must also pay taxes in accordance with applicable regulations.
How is revenue calculated?
1. Know Revenue and Expenses
Revenue in business accounting is the increase in active value that makes capital increase. The income itself consists of business income and outside business. Then, the burden is the costs that must be incurred by your company that will reduce capital.
2. Identify Production Cost Items
Calculate the fixed costs and variable costs included in this production cost. Total costs, such as employee salary costs, building rental fees, and depreciation.
3. Arrange the Income Statement
Make sure you understand this formula, Net profit = Gross profit – operating expenses. By compiling this report, we will determine what selling prices to consumers should be.
4. Calculate All Cost Forming Cost of Sales
After that, it’s time to determine a reasonable selling price, knowing in advance the cost of production. These costs are added to other costs in order to get the expected benefits
What is profit and example?
The motive for making a profit is everything that drives people to take economic action to make a profit.
Someone meets the needs of the dilator’s life behind the motive or hope for profit.
This motive is an impetus that arises with the aim of obtaining additional benefits, both in the form of money and goods.
By getting benefits, it is hoped that one’s wealth can increase, and he can sustain his life better.
How do you calculate profit?
How to Calculate Profit and Loss
Here’s how to calculate the company’s profit and loss:
Net profit = gross profit – operating expenses.
It is very important to compile this income statement so that you can determine what the selling price will be to consumers. Determining the selling price will also affect how much you enjoy the benefits and achieve a return on investment.
Is revenue and income the same?
It is often encountered that many people find it difficult to distinguish between income and profits, especially among farmers. Many farmers equate income with profits derived from farming, especially small farmers. Though income and profits are two different things. In farming, Revenue is the total revenue after deducting the cost of production (costs paid) while the profit is the total revenue after deducting the cost of production (costs paid) and costs calculated.
