How to calculate Net Revenue?

Net Revenue is the revenue a business actually realizes after subtracting discounts, returns, and allowances from the Gross Revenue. It offers a more precise measure of the actual revenue generated from sales transactions.

---

Example:
Consider an Indian electronics store that achieved a gross revenue of ₹7,50,000 in a month. During this period, the store provided discounts totaling ₹50,000 and processed returns worth ₹25,000.

The Net Revenue for the month would be:
Net Revenue = ₹7,50,000 - ₹50,000 - ₹25,000 = ₹6,75,000.

---

Significance:
Net Revenue is a critical metric as it reflects the true revenue of a business, considering the reductions from gross revenue.

The calculation is simple: start with the Gross Revenue and deduct any discounts given to customers, returns received, and other allowances.