Revenue & Sales
Basic

Average Revenue

Average revenue is total revenue divided by units sold — equal to price per unit in a single-price market.

Formula

AR=TRQAR = \dfrac{TR}{Q}

Variables

ARAverage revenue
TRTotal revenue
QQuantity sold

Example

$10,000 over 400 units: AR = $25

Did You Know?

When every unit sells for the same price, the average revenue curve is simply the demand curve.

revenueaveragepricing

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Total Revenue

Basic

Total revenue is the selling price multiplied by the number of units sold.

Net Revenue

Basic

Net revenue is gross revenue less returns, refunds and discounts — the amount actually recognised.

Marginal Revenue

Intermediate

Marginal revenue is the extra revenue earned from selling one additional unit.

Revenue Growth Rate

Basic

The percentage change in revenue from one period to the next.

Monthly Recurring Revenue

Intermediate

Monthly recurring revenue is the number of active subscribers times average revenue per user per month.

Annual Recurring Revenue

Basic

Annual recurring revenue annualises the monthly recurring revenue of a subscription business.