How to Calculate Total Revenue in Excel [Free Template]
Total revenue is an essential measure in financial cases. It helps to analyze the economic performance of a company. Knowing the total revenue of a company also helps to compare it with other companies in the same industry. Over time, people calculated the total revenue manually. But Microsoft Excel is a great software that can help you measure revenue. So in this article, I will show you the steps to calculate total revenue in Excel.
What is Total Revenue?
Total revenue refers to the total amount of money a business or organization receives from its sales of goods or services during a specific period. It is the income before deducting any expenses, such as product-making costs, salaries, rent, and taxes.
Here, Unit Price is the price of a single item, and Quantity is the total number of units sold.
However, it is a fact that calculating the total revenue can be a more intricate process. Because the total revenue always includes factors such as discounts, taxes, shipping costs, etc. These factors must be included in the calculation. In such cases, the formula for total revenue would be:
Total Revenue = (Quantity x Unit Price x (1 – Discount)) + Shipping Cost + (Quantity x Unit Price x Tax)
Remember, the factors may or may not be the same depending on your activities.
Introduction to the Dataset
In the following sample dataset, I have some product details including their quantity, unit price, discount amount, shipping cost, and tax rate.
Process to Calculate Total Revenue in Excel
To calculate total revenue in Excel, select the cells containing sales figures and apply the general formula for total revenue. Lastly, use the SUM function.
Usage Guide
Step_1: First, place an empty column beside your dataset.
The column Revenue (G) is my newly added column here.
Step_2: Then type the formula in cell G2:
=(B2*C2*(1-D2))+E2+(B2*C2*F2)
Formula Explanation
- B2 is the Quantity of Product A.
- C2 indicates the Unit Price of Product A.
- D2 is the Discount amount.
- E2 denotes the Shipping Cost of the product.
- F2 is the Tax Rate on Product A.
Step_3: Press ENTER to apply the formula.
Step_4: Now, copy down the formula by dragging the Fill Handle icon from cell G2:G8.
This way, I determined the revenue generated from each product.
Lastly, I will sum up the total revenue of the products from this dataset with the SUM function.
Step_5: Now type the formula in cell G9.
=SUM(G2:G8)
Step_6: Hit the ENTER key.
Final Result >
This way, you can calculate the total revenue of your business.
Total Revenue Calculator
Total Revenue:
Download Sales Revenue Excel Template
Here’s a free Excel template for you to calculate the total revenue. This spreadsheet lets you calculate total revenue and net income from your sales data. You can set up the quantity, unit price, markup, & shipping cost to analyze your monthly sales. It also generates some charts and graphs to help you understand how your sales perform over the month.
Different Types of Revenue
There are various kinds of revenue in the business world. The following 5 types of revenue are the most important to understand among the several types:
1. Incremental Revenue
It is the additional revenue that is generated from selling more units of a product or service. It is the difference between the revenue from the previous sales and the revenue from the current sale.
To calculate the incremental revenue you must subtract the previous revenue or the original revenue earned from the product or service. It is the extra revenue coming from a product.
Increment Revenue Formula
Increment Revenue = Additional Revenue – Original Revenue
Here,
- Additional Revenue = Additional Number of Units Sold x New/Original Selling Price
- Original Revenue = Original Number of Units Sold x Original Selling Price
2. Average Revenue
It is the revenue earned from products divided by the number of products sold. It represents the average revenue earned per unit of product or service.
Average Revenue Formula
Average Revenue = Total Revenue / Quantity
3. Gross Revenue
It is the total revenue earned from all sales before deducting any expenses or costs. It is also known as gross income. Remember, any type of loss or cost will not be part of the gross revenue.
Gross Revenue Formula
Gross Revenue = The Number of Units Sold x Average Price
4. Quarterly Revenue
It is the total amount of revenue earned in a three-month period of a fiscal year by a company. Many companies tend to report their financial results on a quarterly basis. It helps them compare the financial growth with previous years. The general formula of quarterly revenue is summing up the total revenue of 3 months.
5. Marginal Revenue
Marginal revenue is the increase in revenue earned from the sale of each extra unit of a product or service.
Marginal Revenue Formula
Marginal Revenue = Change in Total Revenue/Change in Quantity
Or,
Marginal Revenue = (Total Revenue – Old Revenue) / (Total Quantity – Old Quantity)
Total Revenue Vs. Net Revenue
Total revenue is the total amount of money a company makes from all sources, like sales, interest, and investments. It is estimating only the income before considering any expenses, losses, or deductions in the business.
On the other hand, net revenue, also known as net sales, is the total revenue minus any deductions or returns. It is the remaining portion of the core income of a business.
Usually, total revenue is important for assessing the overall performance. On the other hand, net revenue is important for indicating the profitability of a business. However, having a smaller difference between total revenue and net revenue is a good sign for a company because it means the revenue deduction was less.
Conclusion
I hope you got an overall idea of the revenue and how to calculate the total revenue using Microsoft Excel. If you’d like to know more about using Excel, visit our blog page anytime! Also, feel free to ask questions in the comment section if you find something confusing about this topic. Thank you!
Frequently Asked Questions
Are total revenue and total income the same?
No. Total revenue and total income are not the same. Total revenue is a component of total income. Total income is a broader concept that includes all sources of income. But total revenue refers to the income generated by a business through sales or other means. Interest, dividends, or rental income – these are part of total revenue. Incomes like wages, salaries, capital gains, etc. are part of total income.
Is total revenue equal to total sales?
Yes, total revenue is equal to total sales. The terms total revenue and total sales can be used interchangeably to refer to the total amount of money earned by a business or organization through its sales activities.
What is the formula for the revenue multiple?
The formula for the revenue multiple is:
Revenue Multiple = Enterprise Value (EV) / Revenue
Here,
- Enterprise Value (EV) = Market capitalization + Total debt – Cash and cash equivalents
- Revenue = Total revenue of the company over a given period (e.g. fiscal year)
While a higher revenue multiple indicates that a company may be generating more revenue per year, a lower revenue multiple may indicate that a company is generating less revenue per year.
How do you calculate total revenue from the cost function?
Unfortunately, it is not possible to calculate total revenue directly from a cost function. The cost function provides information about the relationship between quantity and the cost of producing those goods. But it does not provide any information about the quantity and price of the products that are sold.
Where can I find a company’s total revenue?
You can usually find a company’s total revenue in its financial statements or annual reports. Publicly-traded companies are required to disclose their financial information to the public, including their total revenue, in their annual reports filed with regulatory bodies such as the Securities and Exchange Commission (SEC) in the United States.
How do you calculate total revenue on a balance sheet?
A balance sheet does not show total revenue, as revenue is a component of the income statement. The balance sheet shows a company’s financial position at a particular point in time, including its assets, liabilities, and equity.
What is the function for revenue in Excel?
The function for revenue in Excel is the PRODUCT function, which multiplies the number of items sold by their price per unit to calculate the total revenue.
How do you calculate total revenue from the cost function?
It’s not possible to directly calculate total revenue from a cost function because they are two different concepts. However, you can use the cost function along with other information to estimate the total revenue generated by a business.
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