6.20What is revenue?
1What is it?
Revenue (sales, top line) is the total money earned from selling goods and services before any expenses.
2Why does it exist?
Growing revenue means customers want more of what the company sells. Profits usually can’t grow for long without it.
3Stock market example
For banks, the equivalent is net interest income (NII) plus fees. For IT companies like TCS, it’s service income from clients.
4Quick revision
- Revenue = total sales.
- The "top line".
- Growth in revenue is the foundation for profit growth.
5Knowledge check
Q1. Why is revenue called the top line?Show answer
It is the first line of the P&L.
Q2. Can revenue grow while profit falls?Show answer
Yes, if costs rise faster.
Q3. Main income for a bank?Show answer
Net interest income.
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