Revenue

REVENUE

by Anton Antonio

April 11, 2015

Revenue is another term for income.  Closely associated with the concept of revenue is the concept of profit maximization.  But what relevance do these concepts play in upland management?  They do sound irrelevant, don’t they?

The uplands and forest lands are where most of our natural resources could be found… and natural resources are marketable, negotiable and tradable products.  Upland goods and services also have costs and, therefore, should be managed like any other product for sale in the market.  Sales translate to revenues.

Revenues refers to the total income derived from a given source, resource or product.  Revenue is also the amount of money that a business entity (including upland business ventures) actually receives during a specific period inclusive of discounts and deductions for returned merchandise.  It is the “top line” or “gross income” figure from which costs are subtracted to determine net income.  Revenue is calculated by multiplying the price at which goods and services are sold by the number of units or amount sold.

Profit maximization is the short run or long run process by which the price and output levels that returns the greatest profits are determined.

Revenue determination and profit maximization are management tools that ascertain the viability and/or profitability of an upland business venture.  Both concepts (revenue and profit maximization) are dependent on the single-most important figure in a financial statement represented by revenue.

Just my little thoughts…

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