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Assessing Performance, Starting with Revenues

Revenue (or sales) is one of the most publicized and closely examined numbers in the financial statements. Firms often start their quarterly press releases by reporting the firms’ sales for the period, and only later do they mention earnings. Revenue is important because it is the end result of all the firm’s activities. The financing obtained, the resources acquired, and the goods and services produced are all designed to generate revenue (hopefully enough to cover all of the associated costs). Revenue is more than “the top line” on an income statement; it is also an important determinant of what...



Calculating revenue and growth should be straightforward, but like most things in organizational life, it isn’t. Discover the various factors that affect revenue and growth and several different ways to measure them.