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How to Calculate Revenue in Excel (Simple Formulas + Templates)

By 

Ashley Stander

 on October 2, 2022. 
Reviewed by 

Michelle Meyer

A professional seated at his desk, working with his laptop as he writes something down in a notebook.

Every seasoned business owner knows the value of calculating revenue. They understand that it helps you calculate your profit, perform financial analysis, and do forecasting. This article aims to equip you with easy-to-follow formulas and templates that you can use to calculate your revenue if your business is showing solid growth.

» Want to know how profitable your store is? Learn how to perform an e-commerce profitability analysis

Incremental Revenue

Incremental revenue is the profit a business receives from a certain increase in sales. This can refer to the additional revenue received from releasing a new product or service, or trying new marketing strategies.

Therefore, the original revenue that would have been generated before the additional product or service was introduced in that time period must be subtracted from the adjusted revenue that includes the new product or service.

Formula

A formula can therefore be constructed as follows:

Adjusted revenue (number of units sold x selling price) - Original revenue (number of units sold x selling price)

In Excel, the calculation can be set up as follows:

  1. Original Revenue and Adjusted Revenue are listed separately.
  2. Incremental Revenue is calculated by subtracting the totals (=D3-D2).



Calculating Incremental Revenue in Excel

Average Revenue

Average revenue is the revenue earned for each unit, product, or service that you're selling. People also refer to it as Average Revenue Per Unit or Per User (ARPU).

Formula

Average revenue is calculated by dividing the total revenue by the quantity sold:

AR=TR / Q

Average Revenue = Total Revenue / Quantity

So, if the total revenue of a company is $5 000 and the quantity sold is 1 000, then the average revenue per unit is $5 000 ÷ 1 000 = $5.

In Excel, the calculation can be set up as follows:



Calculating Average Revenue in Excel

Gross Revenue

Your gross revenue is the total amount of money made by your company before expenses are deducted. This includes the sale of shares, property, and equipment as well as interest and exchange rates.

Knowing your gross revenue will help you analyze your financial statements, track your sales volumes, and identify high-impact revenue channels, all to understand how well your business is doing.

Formula

You can calculate your gross revenue in two ways:

  1. Product revenue = the number of units sold x average price
  2. Service revenue = the number of customers x average price of service

In Excel, the calculation can be set up as follows:

  1. Products and services are listed separately.
  2. Quantities sold, prices, and any discounts provided are used to calculate the final total selling price of each product and service.
  3. Total Revenue is calculated by adding the final totals of products and services (E6 + E10)



Calculating Gross Revenue - Credit: Excel Spy

Quarterly Revenue

Quarterly revenue measures the increase in your sales from one quarter to the next. You would use it to review the sales of successive quarterly periods or compare the sales of the same quarter in different years.

It's important to note that quarterly revenue can be influenced by seasonal sales. For example, if the Olympics is hosted in a certain country, it may skew quarterly results and give you an inaccurate view of your company's quarterly revenue.

Formula

You can calculate quarterly revenue growth as follows:

Q2 - Q1 / Q1 x 100

In Excel, the calculation can be set up as follows:

  1. Q1 and Q2 sales are listed separately.
  2. The formula is applied at the bottom before it's converted to a percentage.



Calculating Quarterly Revenue in Excel

Marginal Revenue

Marginal revenue is the increase in revenue that you get from the sale of each extra unit of output. While marginal revenue can stay constant over a certain level of output, it follows the law of diminishing returns and will eventually slow down as your output level increases.

As a business owner, you can use historical marginal revenue data to analyze your customer demand for your products as well as determine your most efficient and effective prices. Finally, this calculation helps you to understand your forecasts because it determines future production planning and schedules.

Formula

This is the formula you can use to calculate your marginal revenue:

Change in Revenue / Change in Quantity

(Total Revenue - Old Revenue) / (Total Quantity - Old Quantity)

Let's look at a quick example:

Your company sells its first 100 products for $1 000. You sell the next products for $8. This means that your marginal revenue for product number 101 is $8.

It's important to note that marginal revenue disregards the previous average price of $10. This is because it only analyzes incremental change. If you sell 115 units for $1 100, your marginal revenue for products 101 through to 115 is $100, or $6.67 per unit.

In Excel, the calculation can be set up as follows:



Calculating Marginal Revenue in Excel

Conclusion

There are profit calculation mistakes to avoid if you're going to use the formulas and spreadsheets provided in this article. If you're not confident to do these calculations by yourself, BeProfit offers an accurate and easy-to-use tool that will remove all the stress and strain from trying to do it yourself. Why not give it a try?

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