When you plan receive a specific amount of sales revenue necessary to consider the possibility of sales and production capacity of the organization, which allows you to produce marketable output. The determining factor is often the capacity of the potential market, given fierce competition.
From the result of forecasting the volume of sales and receipts of revenue depends on the result of the financial activities of the enterprise. Calculation of sales volume should start with the worst-case scenario, i.e. taking into account the probability of partial loss of market due to fierce competition, short supply of raw materials, the emergence of a more quality product.
The second variant of calculation should focus on maximum value of sales with the removal of most of the competitors, expand market channels, improve product quality etc.
The last option is the most likely, that is average. It is necessary to objectively assess the capabilities of the enterprise and the market capacity.
The revenue is calculated based on the volume of products sold, taking into account the applicable price, but without VAT, excise duties, sales and trade allowances, and export tariffs. And due to the fact that the products produced in the past or the current period is realized not completely, during the planning of revenues should take into account the amount of carryover products at the beginning of the planning period and at the end.
Thus, the revenue is equal to the sum of the carryover products in the beginning of the period and the current commercial products, net of the remaining products at the end of the plan period.
To calculate the amount of the proceeds from the sale of products, which has natural-material form, by using the initial value and rates of the goods. That is necessary because the sales prices (excluding VAT) subtract the initial cost (without VAT), and in the end, the resulting amount is the revenue.
Setting a price on their product and receiving revenue, the company receives no net profit, as revenue must be weighed against the costs.
The organization works with profit, if revenue is above the break-even point.