Join Rudolph Rosenberg for an in-depth discussion in this video The basics of revenue analysis, part of Financial Analysis: Analyzing the Top Line with Excel.
Revenue as can be learned in more detail in the course Financial Literacy: Reading Financial Reports, is the total amount that has been invoiced to customers over a certain period of time. It is very different from cash which is a step further when the customer has paid the invoice. It is the means to pay company expenditures and generate profits. It usually is the first priority of a company. As with no revenue, there is no money available to pay bills, salaries, or invest in future growth.
While generating revenue is an important part of running a company, a high revenue number does not necessarily mean good performance. If that revenue does not lead to a profit, then you can question why in the first place you put all the effort into generating that revenue. But still, a company needs revenue to survive, and therefore, revenue analysis is a key element to managing business performance. There are different ways to analyze revenue, different angles to find solutions to different business problems.
Revenue is generated through customers that buy products or services. Through revenue analysis, we will be trying to analyze business growth. The objective will be to understand the underlying factors of business growth or business decline. The main lenses through which we will be diving into revenue performance will be from the customer angle, the product angle, the geographical angle, and so on. Reasons for revenue growth or decline can come from gaining new customers or losing them or from current customers that buy more or fewer products and services.
In this course, you will learn where to find the data that makes up the revenue of a company, how to prepare it for analysis, and the key angles through which to analyze revenue.
Also check out the companion course, Financial Analysis: Analyzing the Bottom Line with Excel.
- Preparing your revenue information
- Comparing past performance
- Analyzing customer data
- Analyzing product information
- Identifying exceptional revenue