Operating Revenues in Excel Formula

Operating revenues are the income generated from the core business activities of a company. They are different from non-operating revenues, which are the income from secondary sources such as interest, dividends, or gains from asset sales. Operating revenues are important for measuring the profitability and performance of a company’s main operations.

How to Calculate Operating Revenues in Excel

To calculate operating revenues in Excel, we need to have the data of the sales volume and the price of each product or service that the company offers. We can use the following formula to calculate the total revenue for each product or service:

Total Revenue = Quantity x Price

Then, we can sum up the total revenues of all the products or services to get the operating revenues of the company. We can use the SUM function in Excel to do this:

Operating Revenues = SUM(Total Revenues)

Alternatively, we can also use the SUMPRODUCT function in Excel to calculate the operating revenues in one step, without having to calculate the total revenues for each product or service separately. The SUMPRODUCT function multiplies the corresponding elements in two or more arrays and returns the sum of the products. We can use the following formula to calculate the operating revenues using the SUMPRODUCT function:

Operating Revenues = SUMPRODUCT(Quantity, Price)

Example

Let’s assume that we have the following data for a company that sells three products: A, B, and C. The quantity and price of each product are given in the table below:

To calculate the operating revenues using the first method, we can use the following steps:

1. In column D, enter the formula =B2*C2 to calculate the total revenue for product A. Drag the formula down to fill the rest of the column.
2. In cell D5, enter the formula =SUM(D2:D4) to calculate the operating revenues by summing up the total revenues of all the products.

The result should look like this:

To calculate the operating revenues using the second method, we can use the following steps:

1. In cell E2, enter the formula =SUMPRODUCT(B2:B4,C2:C4) to calculate the operating revenues by multiplying the quantity and price of each product and summing up the products.

The result should look like this:

As we can see, both methods give the same result of 7000 as the operating revenues of the company.