Does revenue include profit?

I am perplexed by the usage of the word revenue. It's not math since what I'm asking is focused on the word itself. I mix it up with the word turnover, though I've done reading some related topics in Online dictionaries and some websites, some people often use revenue and turnover interchangeably. That's not my main discussion here, anyway.

I just want to confirm my understanding by giving context below:

Suppose there's a company X. The number of transaction that has been done is 100 (According to a site this is called as turnover). Each transaction has 50 sold items. The selling price of each item is £200. The buying price of each item is £100. That means The whole income is

The buying price × the number of items that have been sold × the number of transactions

by assuming each transaction has the same amount of items.

All income = 200 × 50 × 100 = £1,000,000 (1)

The profit = 1000000 - (100 × 50 × 100) = £500,000 (2)

The pure income = (1) - (2) = £500,000 (3)

Sorry if it's too maths, but I believe context would help if someday someone ask something like this. Now, related to my question in the title, is the Revenue (1) or (3)?

My guess, after doing some quick-searching is (1) that means the Revenue includes the profit. Is this correct?

• The pound currency symbol goes before the figures thus £100. Commented Oct 14, 2021 at 10:07
• @MichaelHarvey I've edited it. Thank you. Commented Oct 14, 2021 at 10:50

I'd say "includes the profit" is misleading - the goods may be sold at a loss.

`Revenue` and `Turnover` are used interchangeably, because they mean the same thing - "the total amount of money received for the sale of goods services". As you have shown, this is the amount before any costs are deducted to calculate profit.

Terms such as EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) are commonly used in business to avoid confusion.

• This is only one of several meanings of "turnover" in a financial context, and not the most common one, I think. Commented Oct 15, 2021 at 14:48
• @DavidSiegel Maybe, in strict financial lingo. But to the layman they are the same. The reason I gave the example of EBITDA was to disambiguate. Because of this confusion it is better to use terms which are explicit.
– SiHa
Commented Oct 15, 2021 at 15:00
• At least in the US, I think people with some involvement in business but whgo are not financial professionals, and a fair number who have no particular involvement with business understand "turnover" as the number of times stock is sold and refreshed, not the amount of money taken in. To not even mention that sense makes the answer inaccurate IMO. Also the quote includes a def of "turnover" which is different from "revenue". I rather think that "EBITDA" is a UK-specific term, I have never heard it in the US despite working on financial software for years. Commented Oct 15, 2021 at 15:43
• @DavidSiegel I work for a US owned company and we use EBITDA. Anyway, no point in arguing. Yes turnover, when it comes to stock means something else.
– SiHa
Commented Oct 15, 2021 at 15:55

"Revenue" is the same as gross income the total amount of money the business receives in a given period, often a year, month, or quarter.

"Turnover" can be used in several senses, as this investopedia page describes.

• It can be used to mean "revenue".
• It can be used to mean how quickly a company collects cash from accounts receivable or how fast the company sells its inventory.
• It can be defined as the percentage of a portfolio that is sold in a particular month or year.
• It can be defined as the number of times a product is sold, repurchased and sold again. That is, if a company sells a widget (or a set of them), uses the cash to buy another widget(s) or the parts and labor to make another (set of) widget(s), and then sells that, the cash has been turned over twice. The number of times the company can do this in a given period, often a year, is the turnover for that period.