what is sales formula
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1,111,111 TRP = 11,111 USD
1,111,111 TRP = 11,111 USD
1,111,111 TRP = 11,111 USD
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Sales Formula
The core formula to calculate sales revenue is:
[ \text{Sales} = \text{Number of Units Sold} \times \text{Price per Unit} ]
Key Variations:
Gross Sales: Total revenue before deductions (discounts/returns).
Net Sales: Gross sales minus returns, allowances, and discounts:
[ \text{Net Sales} = \text{Gross Sales} – (\text{Returns} + \text{Discounts} + \text{Allowances}) ]
Profit from Sales:
[ \text{Profit} = \text{Net Sales} – \text{Cost of Goods Sold (COGS)} ]
Practical Use:
Businesses track sales to measure performance, set targets, and forecast growth.
Example: Selling 100 items at ₦5,000 each = ₦500,000 gross sales.
Additional Metrics:
Sales Growth Rate:
[ \frac{\text{Current Sales} – \text{Past Sales}}{\text{Past Sales}} \times 100% ]
Sales formulas are foundational for financial planning and operational strategy.