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Using the example above, the gross revenue would be $50. In contrast, gross revenue is your company's revenue before these deductions being taken out. To make a sizable profit, your company's revenue should be far greater than its expenses. Net revenue is the revenue your company receives after subtracting any expenses such as the cost of goods sold from that revenue.įor example, if you're selling a sweater for $50, the fees for shipping, production, storage and more would be deducted from the $50 to result in your net revenue. The better you're able to understand how net revenue and gross revenue differentiate, the more easily you'll be able to determine their part in your company's finances. Related: Learn About Being a Financial Analyst Net revenue vs. Having a large total revenue means you'll likely have enough income to cover these expenses and the means to stay afloat and profitable for the foreseeable future. This can be particularly helpful if you have many expenses that need to be covered. The larger your total revenue is, the more money your company is generating. If you own an ice cream shop, for example, your total revenue would include all ice cream sales, not just the sales from one flavor or type of sundae.ĭetermining your company's total revenue can be a useful determinant in evaluating its financial health.

Total revenue, also known as total sales, refers to the total income that your company generated from all sales of goods or services.

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In this article, we will define total revenue, explain the difference between net revenue and gross revenue and guide you through the steps for how to calculate total revenue for your business. Calculating your total revenue and understanding the various types is key when it comes to working in sales. Though having various expenses is inevitable as a business owner, having a greater profit or total revenue overall means you'll have the means necessary to maintain operations. Healthy cash flow is essential for a company's financial stability.