What does total revenue represent in a business?

Total revenue refers to the total income generated from the sales of goods or services before any expenses are deducted. It is calculated by multiplying the price at which goods or services are sold by the number of units sold. This figure is crucial for businesses as it provides insight into the overall performance and market demand for their products or services.

In this context, total revenue acts as a fundamental metric revealing how much money a company is bringing in from its primary operations. It is distinct from profit, which considers both total revenue and the costs associated with producing and selling goods or services. Understanding total revenue helps businesses make informed decisions regarding pricing, inventory management, and investment opportunities, enabling them to strategize effectively for growth and sustainability.