Explain the term 'revenue'.

Revenue refers specifically to the income generated from a company's normal business operations. This encompasses the money earned from the sale of goods and services that a business provides as part of its core activities. Revenue is a critical indicator of the financial health of a business and is often the first line item on the income statement. It reflects the total earnings before any costs or expenses are deducted, helping stakeholders assess the company's operational performance.

Understanding revenue is essential because it helps in analyzing how effectively a business is generating income from its primary activities, which is pivotal for any financial assessment. It forms the basis for calculating profits, budgeting, and making strategic decisions for future growth and investment.