Gross Revenue

Graph illustrating gross revenue.

Gross revenue is the total amount of money (income) earned by a company over a period of time.  The term is used in accounting, finance, sales, and general business to describe how a company performed across all of its business units in selling its products or services. 

In business and quarterly reports, gross revenue is often used as an indicator of an organization’s worth because it represents all monies received for selling, licensing, and all other ventures where its goods and services are exchanged for money.

For startups and niche vendors where other indicators don’t exist, gross revenues can be used to value the company’s worth by dividing the value of the company’s assets by gross revenues.

While gross revenues are a key measure of a company’s value, it’s not the sole metric to consider.

What is the difference between gross and net revenue?

Gross revenue is all of the money a company receives for selling goods or services.

Net revenue is derived by subtracting the cost of goods sold (materials and labor) from total sales, along with all the associated expenses including salaries, expenses and overhead. Net revenue then is a measure of how cost effectively the company brings products to market.

Net revenues are also called gross profits. From gross profits, additional costs must be subtracted—taxes due, marketing costs, salaries, etc.—to determine what the company’s net profits are

To summarize:

Gross revenue = total sales of good
Cost of Goods Sold = materials and labor
=
Net Revenues = gross profits
Expenses
=
Net Profit

Example of gross revenue

TabletCo manufactures tablets and sells them for $200. Last year, TabletCo sold 50,000 tablets, earning gross revenues of $10 million. 

From its $10 million, TabletCo pays $2 million for materials and labor to manufacture the tablets. Thus, its net revenues are $8 million. 

Related Terms

Sam Ingalls
Sam Ingalls
Sam Ingalls is an award-winning writer and researcher covering enterprise technology, cybersecurity, data centers, and IT trends, for eSecurity Planet, TechRepublic, ServerWatch, Webopedia, and Channel Insider.

Related Articles

E-Commerce

E-commerce, or electronic commerce, is online-conducted business, including marketing, sales, and fulfillment. Consumers and businesses place and track orders at least partially through the...

Mobile Commerce (M-Commerce)

M-commerce is short for mobile commerce, which involves using cell phones, tablets, and other wireless handheld devices for online transactions. It is most commonly...

Alibaba Group

Alibaba Group is an international technology company with a deep portfolio of companies offering global buyers and sellers platforms to conduct wholesale online transactions. Launched...

Gumroad

Gumroad is an online platform enabling creators and resource producers with a convenient, storefront-free marketplace to sell products like software, graphic designs, lessons, and...

ScalaHosting

ScalaHosting is a leading managed hosting provider that offers secure, scalable, and affordable...

HRIS

Human resources information system (HRIS) solutions help businesses manage multiple facets of their...

Best Managed Service Providers...

In today's business world, managed services are more critical than ever. They can...