What are Revenues?

The Revenue for Materials Select Sector Spdr (XLB) helps us define sales trends over time.

Revenues are the primary indicator of the sales that are generated by a specific company given the general business activities of the parent company and its subsidiaries. Revenues are often an excellent indicator of business activity, but they do not necessarily translate into earnings.

Inclusive of all subsidiaries, the revenues of a company typically represent the company’s ability to sell its products and services within any given time. Typically, these reports come quarterly and annually, and for public companies these reports allow shareholders to evaluate sales.

Changes to revenue growth rates are often caused by product developments, changes to the competitive landscape, or changes to the demand for the products and services sold.

How is Revenue Calculated?

Simply, add the total sales from all facets of a company’s business to determine total revenue.