Revenue

Revenue is the total money a company brings in from selling products or services. It sits at the top of the income statement, which is why it is called the top line. Nothing has been deducted yet.

So high revenue does not mean high earnings. Sell 10,000 coffees at $5 and revenue is $50,000, but if beans, rent, and wages cost $48,000, only $2,000 is left. Subtract operating costs to get operating profit, then taxes and interest to reach net income. When people say how much a company made, they usually mean the latter.

Revenue still matters because it shows the direction of growth first. Profit can rise by cutting costs, but revenue only grows when you sell more or charge more. Rising profit alongside steadily falling revenue means a company is economizing to hold on, not expanding.

One caution when reading it: under accrual accounting, revenue is booked when goods are delivered rather than when cash arrives, so sales can climb while money does not. Check whether accounts receivable are ballooning abnormally and whether operating cash flow is keeping pace with revenue.