Revenue: Definition and How to Calculate

What Is Revenue?

By Jeremy Bowman – Updated Aug 15, 2025 at 2:41 AM EST

Key Points

Revenue is the gross income from business operations before costs are deducted.
Investors use the price-to-sales ratio to assess stock value against revenue per share.
Understanding revenue recognition and cash conversion is crucial for investment analysis.
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Revenue is many things. Commonly known as sales, it’s the top line of the income statement as well as a key financial metric that investors use to measure the financial health of a business. Like any financial metric, there are also rules underpinning the way it’s measured and recorded, and investors should be familiar with these revenue recognition principles.

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An infographic defining and explaining the term "revenue." — Image source: The Motley Fool

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Cash Flow

Cash flow is how we measure the actual money flowing through a business that can sometimes be hidden behind complexities.

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Revenue vs. Profit: What's the Difference?

These two numbers differ but are both important when evaluating a stock.

What Is the Russell 2000 Stock Market Index?

The Russell 2000 index is considered a benchmark for smaller U.S. stocks.

How to Calculate Your Gross Income Per Month

Calculate your monthly inflow before taxes using this metric.

Profit and Loss Statement

Making sense of a P&L statement can help guide your investments. We show you how.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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