Revenue: Definition and How to Calculate

What Is Revenue?

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

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.

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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